On 24 April, the Ministerial Committee on Arab Sector Affairs announced that the Netanyahu government has invested $1.3 billion in the sector over the last two years. During the meeting, the committee announced it would invest $5.6 million in a new program aimed at helping integrate minority communities in the high-tech labor market. According to Prime Minister Netanyahu, who heads the committee, the government was on track to meet the committee’s goals of investing $4.2 billion in the Arab-Israeli sector by 2020 in order to “reduce the social and economic gaps between the minority sectors and the general population in Israel, through changing the mechanisms for allocation [of funds].” The goal of the plan was to bring the Arab sector’s performance in the fields of infrastructure, transportation, education and employment up to par with that of the general population. Several representatives from a number of government offices were in attendance at the meeting. (IH 25.04)

1.2 Bank of Israel Companies Survey for the First Quarter of 2018 Published

The Bank of Israel’s Companies Survey for the first quarter of 2018 indicates that the business sector is continuing to grow impressively. The net balance in the overall business sector increased during the past two quarters to the levels reached in late 2016 and early 2017, and remains positive, to a statistically significant degree. The net balance is positive and statistically significant in the services industry; it is positive and not statistically significant in the manufacturing industry; and it is negative and not statistically significant in the trade industry. In all three of those industries, expectations are for expansion in the next quarter.

The net balance of manufacturing industry output is positive and reflects an increase in exports and in the number of employees. Based on orders for the coming quarter, expectations in the industry are that export sales will increase. The net balance of services industry revenue remains positive and statistically significant, signifying expansion in the sales of services in Israel, and an increase in the total number of professional employees. Expectations in the industry for the coming quarter are that activity will expand and orders from abroad will increase. (BoI 29.04)

1.3 Intel to Receive $380 Million Investment Grant from Israel for Expanding Local Chip Manufacturing

Intel is set to receive a $380 million grant from the Israeli government to support its plans of expanding chip manufacturing in the country, Calcalist reported on 1 May. If approved, the grant will be the largest ever awarded by the Israeli government to a non-Israeli company for a single investment. Intel and the Israeli government, represented by Israel’s Ministry of Finance, Ministry of Economy and the country’s tax authorities, are on the verge of signing the deal. The government has approved Intel’s plan on a conditional basis but Intel still has to submit a detailed plan, although Intel declined to comment.

In February, Intel announced its intention to expand its local manufacturing with a $5 billion investment in Intel’s existing chip and processor plant in southern Israeli town Kiryat Gat. Intel is eligible to receive the grant under an Israeli law intended to encourage capital investments in the country. The grant’s size is dependent on a variety of factors, including the number of new employees Intel will hire for the expanded facility. Intel currently employs around 11,000 people in Israel.

A previous $6 billion expansion of the factory, approved in 2014, netted the company a $300 million grant. The increased production afforded by the expansion boosted Intel’s exports in 2017, according to company data. A January report by the chipmaker stated that Intel’s exports from Israel were valued at $3.6 billion in 2017, up from $3.3 billion from 2016. Intel Israel had exported goods and services valued at $50 billion over the past decade, and invested around $35 billion in the country since it first set up local operations in 1974. (Calcalist 01.05)

Due to the growth in passenger traffic, Terminal 3 at Ben Gurion Airport will be expanded at an investment of some NIS 1 billion, the Israel Airports Authority has announced. Some 36,000 square meters of space will be constructed on four floors. The new building will have 88 new check-in counters and will be connected to the existing terminal building by a bridge.

The approaching summer season is expected to set a new record for flight and passenger numbers. An existing 2,500 square meter structure housing 25 service counters adjacent to the Terminal 3 building will serve as a temporary terminal to ease congestion for departing passengers.

Israel’s open skies aviation policy has resulted in an increase of more than 50% in the number of flights at Ben Gurion Airport and a further 14% increase in the number of international flights is expected this summer, mostly by low-cost airlines. By 2019, Ben Gurion will join the category of large international airports, with over 25 million passengers a year. (Globes 24.04)

Illusive Networks has won two prestigious industry awards back-to-back: the 2018 Red Herring Top 100 Europe award, bestowed each year in recognition of the most exciting and innovative private technology company from the European business region; and the SC Magazine Award 2018 for Best Deception Technology.

Illusive Networks garnered high praise from both organizations for the company’s pioneering deception-based cybersecurity solutions that enable organizations to proactively intervene in the cyber-attack process. Illusive’s latest innovation, Attack Surface Manager (ASM), elevates the role of deception in adaptive security to include preempting attack, and helping customers reduce the attack surface. By discovering and removing hidden elements such as credentials, which are often left behind in the normal course of daily business operations, ASM empowers security professionals to deprive attackers of the means to reach their goals.

Jaffa based flight search engine Alice has raised $1.5 million and has launched a new version of its website. The money was raised from Talma Travel and Tours. So far, Alice has raised a total of $2.5 million. Talma Travel and Tours was also the main investor in the company’s previous round in November 2016, and it has now raised its stake in it. The Alice website went online in April 2016. It allows searches for flights to up to four destinations at once, and over a date range, allowing the user to find the best price within that range, including in business and first class. The new version of the website covers more than 350 destinations, up to a year in advance. The system samples fares for some 250 million flights, in all classes of seats, for one-way or return journeys, or journeys to a combination of destinations. The airlines covered include low-cost airlines. (Globes 24.04)

Fintech startup Reach, which was previously branded as “Seegnature,” has completed a $3.5-million Series A funding round led by San Francisco-headquartered venture capital firm NFX. The REACH platform makes it possible to conduct business meetings remotely, including functions such as verifying the customer’s identity, making payments, joint writing of documents, and digital signatures in real time through a documented video call. The solution meets the requirements of the Prohibition on Money Laundering Law. Reach said it plans to use the funding to double its workforce, expand marketing in the U.S. and open an office in San Francisco

Reach, which has offices in Tel Aviv and Palo Alto, California, develops a service that enables companies to conduct online meetings with clients and sign legally binding documents online. The cloud-based service features screen sharing, identity verification, video communication, documentation, and payment transfers. Founded in 2015, Reach has raised a total of $5.4 million, including the latest funding round. Last year, accounting firm Deloitte selected Reach as one of six leading fintech startups. (Various 23.04)

SecuredTouch announced the completion of a $8 million Series A financing round led by German financing company Arvato Financial Solutions and with the participation of RDC (jointly owned by Elron Electronic Industries and Rafael Advanced Defense Systems) and other investors. In addition to the investment, the two companies will collaborate with SecureTouch’s behavioral biometrics technology integrated into Arvato’s fraud identification platform. This is Arvato’s first investment in Israel.

Ramat Gan’s SecuredTouch is a pioneer in behavioral biometrics for mobile, delivering continuous authentication technologies to strengthen security and reduce fraud while improving customer’s digital experience. SecuredTouch seamlessly collects and analyzes a dynamic set of over 100 different behavioral parameters like keyboard-typing, scroll-velocity, touch pressure and finger size to automatically create a unique user behavioral profile. Its mobile-optimized solutions require no enrollment, they are easy to implement, and provide real time alerts when suspicious activity is detected from login to logout. (Various 23.04)

2.6 XM Cyber Wins Excellence Award for “Rookie Security Company of the Year”

XM Cyber, founded by top executives from the Israeli Intelligence Community, has won the Excellence Award in the “Rookie Security Company of the Year” category at the 2018 SC Awards. The award was presented during the 22nd annual SC Awards gala on 17 April 2018 by SC Media.

XM Cyber’s first fully automated Advanced Persistent Threat (APT) simulation platform continuously exposes all attack vectors, from breach point to any organizational critical asset. It creates a 24/7 loop of automated red teaming that is completed by prioritized actionable remediation. In effect, it operates as an automated purple team that fluidly combines red and blue teams’ processes to ensure organizations are always one step ahead of the hacker.

XM Cyber provides the first fully automated APT Simulation Platform to continuously expose all attack vectors, above and below the surface, from breach point to any organizational critical asset. This continuous loop of automated red teaming is completed by ongoing and prioritized actionable remediation of security gaps. In effect, HaXM by XM Cyber operates as an automated purple team that fluidly combines red team and blue team processes to ensure that organizations are always one step ahead of the hacker. The company has offices in the US, Israel and Australia. (XM Cyber 23.04)

The largest Czech aircraft manufacturer, Aero Vodochody and Israel Aerospace Industries signed a partnership agreement relating to technical and marketing cooperation for the light combat L-159 aircraft. The cooperation draws on the tradition and experience of Aero Vodochody in the field of military light jet aircraft, the L-159 proven robust platform which has been successfully operated and tested in NATO joint operations, Red Air exercises and real combat missions, and IAI’s innovative and cutting-edge technologies. The partners have agreed to integrate new combat proven state-of-the-art avionics and other solutions on the L-159 platform and to jointly market the aircraft. This approach is focused on further strengthening the already proven L-159 and enhance its position in the light attack market.

AERO and IAI have agreed also to collaborate on enhancing pilot training by integrating IAI’s virtual training solutions as part of the overall L-39NG training system. The L-39NG is now the only platform on the market capable of meeting most of the pilot training syllabus including advanced portion. This will be of benefit to customers that decide to use only one platform for pilot training and also for customers that retain the two platforms approach, by reducing the number of advanced trainer aircraft resulting in significant cost reduction.

IAI is a world leader in both the defense and commercial markets, delivering state-of-the-art technologies and systems in all domains: air, space, land, sea, cyber, homeland security and ISR. Drawing on over 60 years of experience developing and supplying innovative, cutting-edge systems for customers around the world, IAI tailors optimized solutions that respond to the unique challenges facing each customer. (Aero Vodochody 25.04)

Ormat Technologies has closed the previously announced acquisition of U.S. Geothermal for a total consideration of approximately $110 million, comprising approximately $106 million funded in cash by the Company to acquire the outstanding shares of common stock of USG, and approximately $4 million, funded from available cash of USG, to cash-settle outstanding in the money options to acquire outstanding shares of USG. As a result of the acquisition, Ormat now owns and operates U.S. Geothermal’s three power plants at Neal Hot Springs, Oregon, San Emidio, Nevada and Raft River, Idaho with a total net generating capacity of approximately 38 MW. In addition, Ormat now owns development assets held by US Geothermal, which include a project at the Geysers, California; a second phase project at San Emidio, Nevada; a greenfield project in Crescent Valley, Nevada; and the El Ceibillo project located near Guatemala City, Guatemala.

The operating assets sell power under existing power purchase agreements at favorable price terms for the electricity, with an aggregated contract capacity of 55 MW. Ormat plans to improve the acquired operating assets and implement synergies and cost reductions which are expected to improve profitability of the operating projects by approximately 50% during 2019. Ormat has put in place a comprehensive integration plan to assure continuous operation of U.S. Geothermal’s assets. The Company is pleased to retain a number of U.S. Geothermal employees and welcome them to Ormat.

With over five decades of experience, Yavne’s Ormat Technologies is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (REG), with the objective of becoming a leading global provider of renewable energy. The Company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter – a power generation unit that converts low-, medium- and high-temperature heat into electricity. (Ormat 24.04)

Santa Clara, California’s Palo Alto Networks, the global cybersecurity leader, has completed its acquisition of Israel-based Secdo. For Palo Alto Networks, the transaction brings sophisticated endpoint detection and response, or EDR, capabilities – including unique data collection and visualization – to Palo Alto Networks Traps advanced endpoint protection and the Application Framework in order to enhance their ability to rapidly detect and stop even the stealthiest attacks. Secdo’s thread-level approach to data collection and visualization goes far beyond traditional EDR methods, which only collect general event data. Once integrated with Traps and the Palo Alto Networks platform, this rich data will feed into the Logging Service and give applications running in the Palo Alto Networks Application Framework greater precision to visualize, detect and stop cyberattacks. Terms of the acquisition were not disclosed. (Palo Alto Networks 24.04)

Hainan Airlines is launching a direct route from Tel Aviv to Guangzhou. The airline will operate three weekly flights between Tel Aviv and Guangzhou starting in August. The launch comes two years after Hainan began its first route to Israel from Beijing and six months after its second route (from Shanghai). The airline will receive a €750,000 grant for the new route, which is expected to renew tourist traffic from China, which has recently declined. Round trip tourist class tickets on the new route will be sold from $500 for the first three flights and afterwards for $622. Price for business class tickets will start at $2,582. (Globes 26.04)

NICE announced that it has entered a definitive agreement to acquire Chicago, Illinois’ Mattersight, a leading provider of cloud-based analytics for customer service organizations. This acquisition further enhances NICE’s offering and customer base. Using interaction analytics, Mattersight gains a deep understanding of both customers and agents, and acts on these insights in real time to connect consumers with the organization in a personalized manner.

The integration of NICE analytics powered by Nexidia and Mattersight’s behavioral analytics technology and domain expertise allows organizations to enjoy the market’s most advanced analytics in the cloud, driving personalization and smart connections in real time. This allows them to stay ahead of the curve of changing customer preferences and create a superior customer experience. NICE will launch a tender offer to purchase the outstanding share capital of Mattersight.

Ra’anana’s NICE is the world’s leading provider of both cloud and on-premises enterprise software solutions that empower organizations to make smarter decisions based on advanced analytics of structured and unstructured data. NICE helps organizations of all sizes deliver better customer service, ensure compliance, combat fraud and safeguard citizens. (NICE 26.04)

Globes reported that a delegation of six representatives from US retail chain Walmart visited Israel in id-April. The delegation included a senior executive of Walmart subsidiary Sam’s Club, who is responsible for cybersecurity, digital media and logistics. The delegation was reportedly the guest of Israeli businessman Ohad Finkelstein. The delegation looked at some 20 startups and met with senior Israeli businesspeople including the founder of website recommendations company Taboola.

The aim of the visit was to investigate potential collaborations or investments in Israeli cybersecurity startups. Globes says a second Walmart delegation will visit Israel in June as part of Israel Cyber Week. Members of the delegation also stressed that Walmart has no plans to open “brick and mortar” outlets in Israel. What does interest the world’s largest retail chain is Israel’s innovative technologies and startups. Walmart has had informal activities in Israel for nine years, connecting it to Israeli companies with new technology to offer. (Globes 29.04)

BMW has already made clear its intent to launch self-driving cars by 2021. Now, the automaker has decided on solid-state LiDAR (Light Detection and Ranging) sensors and computer vision tech from Israel’s Innoviz to enable its Level 3 – 5 autonomous vehicles to “see” their surroundings. For clarity, level 3 involves highly automated driving, level four is highly automated while level five is entirely autonomous, which means a human couldn’t intervene even if they wanted to. LiDAR sensors, which use lasers to help self-driving cars figure out how to navigate, are usually quite bulky and constantly spinning on the roof of the car. The solid-state LiDAR sensor from Innoviz is much smaller and doesn’t spin. Next year, the InnovizOne will available as a built-in device. BMW has already been working with Intel and Mobileye concerning autonomous driving.

In addition to LiDAR sensors, Innoviz brings object detection (people, cars, trucks, bikes, lane markings), tracking, classification and other functionality to BMW. This partnership also includes collaboration with auto industry supplier Magna, which participated in a $65 million Series B round in Innoviz last September.

Kfar Saba’s Innoviz is a leading provider of cutting-edge LiDAR remote sensing solutions to enable the mass commercialization of autonomous vehicles. The company’s LiDAR products deliver superior performance at the cost and size required for mass market adoption. Available now, InnovizPro offers unrivaled angular resolution at the highest frame rate of any LiDAR solution currently on the market. The company’s automotive-grade LiDAR offering a comprehensive mass-market solution, InnovizOne, will be available in 2019. Innoviz is backed by strategic partners and top-tier investors including Aptiv (Delphi Automotive), Magna International, Samsung Catalyst, SoftBank Ventures Korea, 360 Capital Partners, Glory Ventures, Naver and others. (Innoviz 28.04)

Private equity fund Permira has entered into a definitive agreement to acquire Cisco’s Service Provider Video Software Solutions (SPVSS) business (formerly known as NDS). Following completion of the deal, Permira Fund will create a new, rebranded company focused on developing and delivering video solutions for the Pay-TV industry. No financial details were disclosed but sources close to the deal say that Permira will be paying Cisco about $1 billion. The deal ends an unprofitable chapter for Cisco, which acquired NDS from Permira and Rupert Murdoch’s News Corporation in 2012 for $5 billion. Changes in the way people consume television have contributed to NDS’s fall in value as the Jerusalem based company’s customers are traditional cable and satellite TV providers.

The new company will encompass a broad portfolio, including Cisco’s Infinite Video Platform, cloud digital video recording, video processing, video security, video middleware, and services groups. Cisco will retain the video and media technology related to its core business in networking, multi-cloud, security, data, and collaboration. Permira has in the past held a controlling stake in Israeli drip irrigation systems provider Netafim. (Permira 01.05)

Feldman & Son, a subsidiary of Tiferet Group Holdings, will be the sole representative in Israel of Japanese mechanical engineering equipment manufacturer Komatsu. The cooperation agreement between the two companies was signed during a professional exhibition in Paris. Under the agreement, Komatsu and N. Feldman will build a logistics center in Israel within two years at an investment of NIS 30 million. The center will have 20 employees, albeit it is still unclear where the center will be built.

Tiferet Group acquired N. Feldman two and a half years ago, among other things because of a projected shortage of mechanical engineering equipment for a series of anticipated infrastructure projects around Israel. The group announced its intention of importing advanced innovative mechanical engineering equipment to Israel under its cooperation agreement with the Japanese concern. Tiferet Group estimates the mechanical engineering equipment market in Israel over the past year at NIS 1.7 billion.

Tiferet Group also holds a franchise to import leading brands of agricultural equipment to Israel such as mechanical engineering equipment and spare parts for trucks, tractors, and vehicles. N. Feldman recently signed a representation agreement in Israel with a Chinese concern, in which it plans to import equipment for the construction industry to Israel. (Globes 30.04)

CyberArk has received several new security industry awards recognizing it as the leader in product innovation and effectiveness – delivering exceptional simplicity, automation and risk reduction across on-premises, cloud and DevOps environments.

At RSA Conference, the CyberArk Privileged Account Security Solution was recognized as a Cyber Defense Magazine InfoSec Award winner and an Info Security Products Guide Global Excellence Award winner. The award wins are the latest in a series of industry accolades for the market leader.

CyberArk was also celebrated as an SC Awards finalist for Best Identity Management Solution and Best Enterprise Security Solution. Additionally, it was recently named a Government Security News (GSN) Homeland Security Award winner for Best Physical Logical Privileged Access Management Solution and Best Identity Management Platform; a CRN 5-Star Security Vendor and Coolest Identity Management and Data Protection Vendor; and a winner in the Computing Security Excellence Awards for Best Identity and Access Management solution.

Petah Tikva’s CyberArk is the global leader in privileged access security, a critical layer of IT security to protect data, infrastructure and assets across the enterprise, in the cloud and throughout the DevOps pipeline. CyberArk delivers the industry’s most complete solution to reduce risk created by privileged credentials and secrets. (CyberArk 30.04)

Miami Dade College (MDC), the institution of higher education with the largest undergraduate enrollment in the United States, and Cyberbit have collaborated to open the MDC Cyber Range training facility, a hands-on cybersecurity training center that will provide simulation training for cybersecurity professionals in protecting national assets and infrastructure against cyberattacks. Powered by the Cyberbit Range platform, this groundbreaking facility will be part of MDC’s new cybersecurity center.

The MDC Cyber Range will be the most advanced cybersecurity training and education center in Florida. It will produce highly qualified graduates, who will fill critically needed cybersecurity positions, and will create more employment opportunities for MDC students. Training by simulation is proven to dramatically increase the skills of cybersecurity workforces and prepare them to meet the increasing complexity and volume of real-life cyber threats. With recent studies noting that a cyber-attack occurring around the globe every 39 seconds, MDC partnered with Cyberbit to help cybersecurity practitioners obtain the highest level of skills needed for careers in cybersecurity.

The MDC Cyber Range will support MDC’s important initiative to grow cybersecurity competency in Florida and help fill thousands of open cybersecurity positions in the region and nationwide. The college will expand cyber education available to students and prepare them for careers in one of the country’s fastest growing technical professions. In addition, the facility will offer hands-on training, certification and assessment for commercial and public-sector organizations in Florida. The MDC Cyber Range is scheduled to open in the third quarter of 2018.

Ra’anana’s Cyberbit provides a consolidated detection and response platform that protects an organization’s entire attack surface across IT, OT and IoT networks. Cyberbit products have been forged in the toughest environments on the globe and include: endpoint detection and response powered by behavioral analysis, security automation, orchestration and response (SOAR), ICS/SCADA security (OT security), and the world’s leading cyber range for simulated cyber training. (MDC 01.05)

3.1SDI Signs Letter of Intent with King Abdullah II Design and Development Bureau

Wakefield, Massachusetts’ Security Devices International announced the signing of a Letter of Intent (LOI) with the King Abdullah II Design and Development Bureau (KADDB) in Jordan. The LOI was formalized to establish a partnership between SDI and KADDB to open a production line in Jordan to supply SDI’s less lethal 40mm munitions in the Middle East and North Africa (MENA) region.

SDI is a technology company specializing in the areas of Military, Law Enforcement, Corrections, and Private Security. The Company develops and manufactures innovative, less lethal equipment and munitions. KADDB is an independent government entity within the Jordan Armed Forces (JAF) aiming at becoming a global defense and security research and development hub in the region. The Bureau’s scope of work includes Defense Design and Development, Test and Evaluation, Technology Incubation in the Kingdom, and Defense Technology Training. (SDI 23.04)

Boeing and Gulf Air celebrated the delivery of the first 787 Dreamliner for the national carrier of the Kingdom of Bahrain. The airplane also debuts the carrier’s new livery. Gulf Air is set to take delivery of four more Dreamliners this year. The airline plans to introduce the 787 on its twice-daily service between Bahrain and London Heathrow before deploying the long-range efficient jet on other routes. The first Gulf Air 787 – painted in the airline’s new livery – recently flew a special mission to the airline’s home base to perform a fly pass over the 2018 Bahrain Grand Prix. Formula 1 race fans were treated to a dramatic aerial display prior to the start of the championship race. (Boeing 26.04)

3.3 Hyperloop Transportation Moves Forward with First Commercial Hyperloop System in the UAE

Playa Vista, California’s Hyperloop Transportation Technologies (HyperloopTT) signed an agreement with Aldar Properties PJSC, the leading real estate developer in Abu Dhabi, which will allow HyperloopTT to start construction of a Hyperloop system as well as HyperloopTT’s XO Square Innovation Center, and a Hyperloop Visitor Center. The construction site is located in Aldar’s Seih Al Sdeirah landbank in Abu Dhabi and in close proximity to the residential development Alghadeer. It is conveniently located on the border of the Emirates of Abu Dhabi and Dubai, close to the Expo 2020 site and Al Maktoum International Airport. HyperloopTT plans construction of the line in several phases starting within the ten kilometer allocation, with further development aimed at creating a commercial Hyperloop network across the Emirates and beyond.

Hyperloop Transportation Technologies is an innovative transportation and technology company focused on realizing the Hyperloop, a system that moves people and goods at unprecedented speeds safely, efficiently, and sustainably. Through the use of unique, patented technology and an advanced business model of lean collaboration, open innovation and integrated partnership, HyperloopTT is creating and licensing technologies.
Aldar Properties PJSC is the leading real estate developer in Abu Dhabi with $10 billion in assets, a 75 million sq. m land bank, and through its iconic developments, it is one of the most well known in the United Arab Emirates, and wider Middle East region. (HyperloopTT 19.04)

Popular Dubai cafe brand More has announced a franchising expansion after signing off new outlets in Kuwait and Bahrain as well as a soon to be opened outlet in Jeddah. Established in Dubai in 2002, More, which is inspired by European cafe culture, is targeting growth in the Gulf region, based on customer feedback. Tamdeen Food Company has signed a franchise agreement in Kuwait, with the first More and Glow by More kitchen set to open in late summer in the recently opened Al Kout Mall. More is also expanding in Saudi Arabia with Jeddah corniche the first location to open during this summer. Another franchisee agreement has been signed with Bahraini partner Samhaan Holding and the first outlet is due to open in the late summer at Gravity Village. (AB 21.04)

Al Ahli Group CEO Khammas says UAE has enough theme parks for time being. Al Ahli Group had signed a global licensing deal with Twentieth Century Fox Consumer Products in 2015, allowing it to build four Fox parks anywhere outside the US. The first one was to be a four million square feet property in Dubai adjacent to Outlet Mall, with attractions based on Fox products, such as The Simpsons, Ice Age, Night at the Museum, Planet of the Apes and Titanic. It was due to be completed by 2020, but work has yet to begin.
In recent years, Dubai Parks and Resorts has built Bollywood, Legoland, MotionGate and Riverland. IMG World has launched next to Global Village and Six Flags is expected to open in late 2019. Abu Dhabi has Ferrari World, with Warner Bros. Abu Dhabi opening this summer. (AB 29.04)

Al Hokair Group plans to roll-out 10 Holiday Inn Express hotels in Saudi Arabia over the next 15 years as part of an agreement with InterContinental Hotels Group (IHG). Al Hokair expects its hospitality businesses to see significant improvements in 2018, following a 25% increase in its number of keys over the last 12 months, from 4,548 to 5,661 rooms. Al Hokair’s business, particularly in Saudi Arabia, is benefiting from an increase of government assistance to companies involved in ongoing projects.

Al Hokair announced a master developer agreement with InterContinental Hotels Group (IHG) which will see the debut of the Holiday Inn Express brand in Saudi Arabia, with a roll-out of 10 hotels expected over the course of the next 15 years. The first 200-room hotel will be built in Jeddah, which will be followed by other locations across the kingdom. All the hotels will be operated under long-term franchise agreements. Currently, Al Hokair operates six Holiday Inn hotels in Saudi Arabia, part of a larger portfolio of over 40 hotels spread across Saudi Arabia, the UAE, Jordan and Turkey. (AB 23.04)

3.7 Apollo Endosurgery Approval of ORBERA365 in the Kingdom of Saudi Arabia

Austin, Texas’ Apollo Endosurgery, a global leader in less invasive medical devices for bariatric and gastrointestinal procedures, announced that the Saudi Food and Drug Authority (SFDA) has approved the ORBERA365 Managed Weight Loss System and has issued a Medical Device Marketing Authorization (MDMA) for the product. This MDMA allows Apollo Endosurgery to market ORBERA365 in the Kingdom of Saudi Arabia with its exclusive distribution partner, AL-Nozha Medical.

This approval expands the reach of ORBERA365 into the largest bariatric market in the Middle East with over 15,000 procedures performed per year. The prevalence and cost of obesity in the Kingdom of Saudi Arabia are rapidly increasing and the country currently ranks as the 15th most obese nation with an overall obesity rate of 33.7% and projected to reach 59.5% by 2022. Obesity is one of the most common health issues globally and is the source of various diseases including hypertension, diabetes and obstructive sleep apnea. (Apollo Endosurgery 23.04)

Another phase of the Mohammad Bin Rashid Al Maktoum Solar Park began generating 200 MW of clean energy on 30 April — enough to power 60,000 homes annually. Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, inaugurated the completed first stage of the third phase of the world’s largest single-site solar park off Al Qudra in Dubai. Due to the size of the solar park, the Dubai Electricity and Water Authority (Dewa) has divided its construction into four phases. The first and second phases, which produce 13MW and 200MW respectively, are already generating clean power. The 800MW third phase is divided into three stages and is being developed by a consortium led by the Abu Dhabi Future Energy Company (Masdar) with EDF Group, through its subsidiary EDF Energies Nouvelles. The first stage was inaugurated on 30 April, while the second and third stages, which have a capacity of 300MW each, will be completed in 2019 and 2020, respectively.
The solar plant is the first of its kind in the Middle East and North Africa, with an advanced solar tracking system to increase generation efficiency. It also uses unique technologies including over 800,000 self-cleaning solar cells that maintain a high-performance level. (WAM 01.05)

The World Bank has said that it expects economic growth in the Middle East edge up to 3.1% in 2018, up from 2% in 2017, according to the bank’s latest Middle East and North Africa Economic Monitor. The increase in growth is expected to be broad-based, driven by a favorable global economic environment, stability in the oil market at slightly higher prices, and the resumption of post-conflict reconstruction.

On the back of a good performance by Gulf Cooperation Council countries, oil exporters could see growth reach 3% in 2018, double the rate in 2017. Growth among oil importers is expected to increase to 4% on average from 2018 to 2020, driven by a sharp rebound in Egypt and a rise in remittances, tourism and exports, the report expected. The World Bank said almost all countries in the region have embarked on major reforms to reduce or eliminate energy subsidies, identify new sources of non-oil revenues and expand social safety nets to shield the poor from adverse effects of change. While stabilization policies have helped economies adjust in recent years, we need much faster growth to absorb the hundreds of millions of young people who will enter the labor market in the coming decades. (AMMONNEWS 17.04)

According to the Central Administration of Statistics (CAS), Lebanon’s average inflation rate rose by 5.36% y-o-y, compared to an average inflation rate of 4.77% recorded by March 2018. The average costs of Housing and utilities (including: water, electricity, gas and other fuels), which grasped a combined 28.4% of the Consumer Price Index (CPI), rose by 5.20% year-on-year (y-o-y) by March 2018. Specifically, average Owner-occupied rental costs constituted 13.6% of this category and increased by 4.23% y-o-y. As for the average prices of Water, electricity, gas, and other fuels (11.8% of the Housing & utilities component), they rose by an annual 6.13% over the same period, mainly due to the increase in average oil prices. Moreover, the average prices for Food and non-alcoholic beverages (constituting 20% of the CPI) and Education costs (6.6% of CPI) registered yearly upticks of 3.69% and 3.95% by Q1/18. The average price of Transportation (comprising 13.1% of the CPI) gained an annual 5.33%. (CAS 23.04)

Jordan’s Department of Statistics announced that Consumer Price Average (inflation) reached 124 points in March 2018 against 118.8 during March 2017, an increase of 4.4%. The main commodities groups, which contributed to this increase, were Transport – 8.7%, Cereals and its Products 22.5%, Tobacco and cigarettes – 14.4%, Rents – 2.9% and meat & poultry – 4.7%. Meanwhile, prices fell for Vegetables, Dried and Canned Legumes 14.7%, clothes 1.9% and shoes 0.7%.

The Consumer Price Average for March 2018 has increased by 0.4% compared with the previous month (Feb) 2018. For the first three months of 2018, inflation has increased by 3.7% compared with the same period of 2017. As for the core inflation of the Consumer Price Index for March 2018 (which is calculated after excluding the most fluctuating commodities’ prices of food, fuel , lighting and transport group) it has reached 127.9 against 124.7 recording an increase of 2.5% as compared with the same month of 2017. (DoS 16.04)

5.4 Jordan’s Exports Increase by 0.1% and Imports by 3.9% During First Two Months of 2018

The statistical data issued by the Jordanian Department of Statistics indicate that the value of total exports reached JD.780.8 million during January and February 2018. This was a decrease of 4.5% compared with the same period of 2017. Meanwhile, the national exports value reached JD.647.8 Million during January and February 2018, marking an increase by 0.1% compared with the same period of 2017. The value of re-exports reached JD 133.0 million during January and February 2018 which indicates a decrease by 21.7% as compared with the same period of 2017. The imports value reached JD.2333.2 million during January and February 2018, thus increasing by 3.9% compared with the same period of 2017.

The deficit in the trade balance, which is calculated by deducting the value of imports from the value of total exports, has reached JD.1552.4 million. The deficit has increased during January and February 2018 by 8.8% compared with the same period of 2017. The imports coverage by total exports has become 33.5% during January and February 2018 while it was 36.4% for the same period of 2017, which means a decrease by 2.9%. (DoS 01.05)

Despite the improvements achieved over the years, the Jordanian labor market is still facing many challenges, especially that of foreign labor, the Department of Statistics (DoS) said. The average monthly salary in the public and private sector has increased from JD60 in the mid-1970’s to JD211 in the 1990’s, reaching JD493 in 2016. The number of social security subscribers increased from 366,000 in 2000 to 1,227,110 in 2016. However, foreign labor has been taking large numbers of jobs, consequently increasing joblessness among Jordanians. Another challenge lies in female engagement in the economy, which still stands below desired levels. In 2017, Jordanians’ participation in the labor market reached 60.8% for men and 17.3% for women with a total average of 39%. (JT 29.04)

Iraqi dictator Saddam Hussein has been dead for more than a decade but Kuwait is still receiving reparations for his 1990 invasion, with the latest tranche of $90 million approved on 20 April. The payment was the first authorized by the United Nations Compensation Commission since 2014 when there was a pause in reparations due to a security crisis in Iraq, notably the takeover of large swatches of the country by the Islamic State group. The commission was set up by the UN Security Council in 1991, the same year that a US-led coalition drove Saddam Hussein’s forces out of Kuwait.

It has been authorized to pay out $52.4 billion to individuals, corporations, government bodies and other organizations that incurred losses directly caused by the Iraqi leader’s incursion and occupation of Kuwait. The funds come from a levy on the sale of Iraqi oil and petroleum products. Including this payment, the commission has doled out $47.9 billion to an estimated 1.5 million claimants. Until it requested a pause in 2014, Iraq had adhered to the levy, although some have questioned whether the scheme remains fair to a still-struggling nation, given that Saddam Hussein was ousted from power by another US invasion in 2003. (AB 21.04)

Philippine President Rodrigo Duterte said he will permanently stop deploying workers to Kuwait amid rocky diplomatic relations between the two nations. The leader also asked Filipinos working as household helpers in the Middle East state to come home and appealed to professional workers to do the same. More than 250,000 Philippine citizens work in Kuwait.

Relations between the Philippines and Kuwait have been rocky since the body of Filipina domestic worker Joanna Demafelis was found stuffed in a freezer in an abandoned apartment in Kuwait in February. In mid-April, Kuwait ordered Manila’s envoy to leave and recalled its own, while detaining several people after an online video of Philippine diplomatic staff helping a Filipino worker flee an employer surfaced on social media and reignited tension between two nations, prompting an apology from Duterte’s government. The Middle East remains the Philippines’ largest destination for land-based workers with more than 1 million deployed in 2016.

Abu Dhabi’s inflation rate in consumer prices for the first quarter of 2018 stood at 3.9% compared with the same period of 2017, the Statistics Centre of Abu Dhabi (SCAD) reported. SCAD has recorded an increase in the CPI to 112.2% during the first quarter of 2018, up from 107.9% during the same period of 2017. A comparison of monthly price data reveals an increase of 2.7% in consumer prices in March 2018 compared with March 2017. However, the CPI dropped one% in March 2018 compared with the previous month.

As the results indicate, consumer inflation during the first quarter of 2018 was driven mainly by the transport group, which increased by 10%, contributing 35.7% of the overall increase in the CPI. A key contributor to the rise in consumer prices during the period under review was the “food and beverages” group, which accounted for 15.7% of the overall increase in the CPI during the first three months of 2018 compared with the same period of 2017, reflecting a 5.3% surge in the group’s prices. Meanwhile, the ‘housing, water, electricity, gas and fuel’ group detracted 26.6% from the overall increase in the CPI during the first quarter of 2018, reflecting a three% fall in house rents during the period under review.

The report went on to say that since the impact of inflation varies with the household’s welfare level, a breakdown of the rise in consumer prices during first quarter of 2018 compared with same period of 2017 indicates an increase of 3.9% for households of the bottom welfare level. The corresponding rises for households of the middle and the top welfare levels were 3.6 and 4.1%, respectively. According to SCAD, the CPI is expected to increase by 2.7% for the second quarter of 2018, compared with Q2 2017. (SCAD 29.04)

Dubai’s real gross domestic product (GDP) reached AED389 billion ($105.9 billion) in 2017, up by AED10 billion on the previous year, Dubai Statistics Centre (DSC) has revealed. According to DSC, the transportation and storage sector was the biggest contributor to total economic growth at 18.5%, surpassing wholesale and retail trade, traditionally the largest sector in the emirate, which contributed 8.3%. Transportation and storage includes all land transportation of individuals and goods, rail transportation, water transport, handling and storage activities, postal activities and air transportation of individuals and goods. Air transportation contributed the most as the two national air carriers – Emirates and flydubai – accounted for the largest share of passengers travelling via Dubai airports.

Real estate accounted for 7.1% of Dubai’s real GDP contributing AED27.6 billion in 2017 compared to AED25.7 billion in 2016. The construction sector showed significant improvement compared to previous years, contributing AED24.5 billion, which represented a growth of 3.5% compared to 2016. The sector contributed 6.3% of Dubai’s real GDP and 7.8% of total growth. The figures also showed that manufacturing activity contributed 9.4% of Dubai’s real GDP with a total value of AED36.8 billion in 2017 while accommodation and food service activities contributed 4.9% as Dubai emerged as a favorite destination for millions of visitors. In 2017, the number of visitors to Dubai reached almost 16 million, growing by 6% compared to 2016. (AB 21.04)

According to new figures from Dubai’s Department of Tourism and Commerce Marketing, approximately 4.7 million international visitors in the first quarter of 2018, a 2% increase over the same time period last year. There was a 7% increase in the number of Indian visitors to 617,000, which helped level out a relatively stable second place Saudi Arabia (which saw a 1% decline) and as well as an 8% decrease in visitors from the UK. The fourth largest source market was Russia, from where 259,000 tourists visited in Q1. The figure represents a 106% increase over Q1/17, which Dubai Tourism credits to the availability of visa-on-arrival facilities for Russian citizens. China came in fifth with a 12% increase in visitors to 258,000.

Most European countries saw double digit increases in the number of visitors that came to Dubai. Germany, for example, came in seventh place with a 13% increase in visitors to 194,000, while French visitors rose 12% to 103,000 and Italian visitors increased 2% to 80,000. Of the rest of the top 10 feeder markets, six place Oman saw a 4% reduction from Q1 2017, while visitors from the eighth place US rose by 2%. Nine placed Iran and tenth placed saw declines of 19 and 22%, respectively. (AB 25.04)

Egypt said on 27 April that its non-oil exports for the first quarter of 2018 had increased by 15% compared with a year earlier, reaching $6.324 billion. The volume of foreign trade in the same period grew 9% to $21.265 billion, up from $19.520 billion, the Trade Ministry announced. The trade budget deficit improved by 2%, the statement said. The improvements were thanks to increased exports from Egypt’s chemicals, fertilizer and clothes manufacturing sectors, among others, it said. (Reuters 28.04)

Morocco’s Moulay Hafid Elalamy, Minister of Industry, Trade, Investment & Digital Economy was optimistic about Morocco’s automotive industry. Inaugurating the 2018 edition of the Automotive Subcontracting Fair, which took place from 25 – 27 April in Tangier, the minister set himself the challenge of reaching 1 million vehicles produced each year in Morocco by 2025. Commenting on the performance and achievements of the sector, Elalamy said that Morocco aspires to make the automotive sector a real vector of development, stating that the automotive industry is the leading export sector with nearly MAD 70 billion of turnover registered in 2017, compared to MAD 40 billion in 2014, marking 44.5% of industrial exports. The minister added that the number of jobs created by the sector between 2014 and 2017 stood at 83,845 new positions, thus contributing to the creation of 29% of industrial jobs.

The automobile industry is considered one of the most promising and dynamic sectors in Morocco, greatly increasing Moroccan exports through the help of its human, material, and technical assets and potentials. Moreover, Morocco has become a favorite investment destination for many of the world’s leading car manufacturers, including the leading French manufacturer Renault, which opened a plant in Tangier in 2012. In 2015, France’s PSA Peugeot Citroen announced that it will open a manufacturing plant in the city of Kenitra. The direct result of this new plant will be the creation of 4,500 direct jobs and 20,000 indirect jobs by the time the factory becomes operational in 2019. According to the minister, these investments boost Moroccan exports, contributing to a reduction in Morocco’s trade imbalance. (MWN 28.04)

Turkey’s exports in the first quarter of 2018 reached $41.2 billion, up 8.9% from the same period in 2017, while imports rose to nearly $62 billion, up 22.7%, according to Turkish Statistical Institute (TUIK) data released on 30 April. The figures indicated a rising foreign trade deficit in the period, up to $20.7 billion. The percentage of imports covered by exports from January to March was 66.5%, according to the TUIK data. Turkey’s foreign trade volume reached $103 billion in the first three months of 2018, an annual rise of 17%.

Exports to EU countries, the country’s main trading partner, climbed 21.4% to $21.3 billion during the same period. Some 51.8% of total Turkish exports were delivered to EU countries from January to March this year, up from 46.5% in the same quarter of 2017. TUIK said Germany was Turkey’s top export market, at $4.2 billion, with a 10.2% share of total exports, followed by the U.K with $2.63 billion, Italy with $2.56 billion, and Iraq with $2 billion. Turkey imported the most from China ($6.03 billion), Russia ($6 billion), Germany ($5.4 billion) and the U.S. ($3 billion) in the same period.

The manufacturing industry represented the lion’s share of total exports at 93.6%, followed by agriculture and forestry (3.6%), and mining and quarrying (2%). The share of high technology products in manufacturing industry exports was 3.4% while exports’ share in medium-high and low technology products were 36.9 and 26.2% respectively. (TUIK 30.04)

Turkey’s total tourism income increased by 31.3%, year-on-year, reaching $4.25 billion in the first quarter of 2018, according to a report released by the Turkish Statistical Institute (TurkStat) on 30 April. The report showed that 76.1% of tourism revenue, excluding GSM roaming and marina service expenditures, came from foreign visitors and the rest from citizens living abroad. Turkey welcomed more than 6.1 million tourists in the first quarter of this year, an increase of 26.4% from the same quarter in 2017. According to TurkStat, the number of Turkish citizens traveling abroad in the quarter rose by 9.1% over the same period and reached almost 2.7 million. (TurkStat 30.04)

After years of agony and deep reforms, the Greek economy is finally on the path to recovery, the Organization for Economic Cooperation and Development (OECD) said on 30 April. Public finances have gained in credibility and investors are feeling confident again about Greece’s prospects, the OECD said as it presented a report on the country that is slowly emerging from years of austerity after narrowly avoiding crashing out of the Eurozone. But Athens still must tackle unemployment, poverty and inequality which all remain high.

Greek unemployment, the highest in the Eurozone, will progressively slide to 20.4% in 2018 and 19.4% next year, the OECD predicted in the report. Greece’s gross domestic product showed growth of 1.4% last year after nine years of deep recession prompted by a debt crisis. Eurozone finance ministers on 27 April set a two-month countdown to agree Greece’s high-wire exit from eight years of bailout programs with divisions deep over how much debt relief Athens actually needs.

Greece has been at the mercy of three bailout programs since 2010 when its public finances collapsed, pushing the country into a deep economic depression and bringing crisis to the Eurozone. Athens has yet to approve its last reforms, including a round of controversial privatizations, with Eurozone ministers demanding full delivery ahead of ministerial talks in Luxembourg on 21 June. (AFP 30.04)

On 13 May, Israelis will celebrate Jerusalem Day (Hebrew: Yom Yerushalayim), a national holiday commemorating the reunification of Jerusalem and the liberation of the Old City in the aftermath of the June 1967 Six-Day War. The day is officially marked by state ceremonies and memorial services. The Chief Rabbinate of Israel declared Jerusalem Day a minor religious holiday to mark the regaining of access to the Western Wall. It is a regular work day, albeit there are many festive events held, mostly in Jerusalem.

On 12 May 1968, the Israeli government proclaimed a new holiday – Jerusalem Day – to be celebrated on the 28th of Iyar, the Hebrew date on which the divided city of Jerusalem became one. On 23 March 1998, the Knesset passed the Jerusalem Day Law, making the day a national holiday.
A ceremony is held on Yom Yerushalayim to commemorate the Ethiopian Jews who perished on their way to Eretz Israel. In 2004, the Israeli government decided to turn this ceremony into a state ceremony held at the memorial site for Ethiopian Jews who perished on their way to Israel on Mount Herzl.

Ramadan 2016 is expected to start on the night of 15 May and will continue for 30 days until the evening of 14 June. Ramadan is the ninth month of the lunar Islamic calendar, which lasts 29 or 30 days according to the visual sightings of the crescent moon according to numerous biographical accounts compiled in Hadiths. It is the Muslim month of fasting, in which Muslims refrain from dawn until sunset from eating, drinking and sexual relations. The sawab (rewards) of fasting are many, but in this month, they are believed to be multiplied. Muslims fast in this month for the sake of demonstrating submission to God and to offer more prayers and Quran recitations.

Ramadan is a time of spiritual reflection and worship. Muslims are expected to put more effort into following the teachings of Islam and to avoid obscene and irreligious sights and sounds. Purity of both thoughts and actions is important. The act of fasting is said to redirect the heart away from worldly activities, its purpose being to cleanse the inner soul and free it from harm. It also teaches Muslims to practice self-discipline, self-control, sacrifice and empathy for those who are less fortunate; thus encouraging actions of generosity and charity (zakat).

It becomes compulsory for Muslims to start fasting when they reach puberty, so long as they are healthy, sane and have no disabilities or illnesses. The elderly, the chronically ill and the mentally ill are exempt from fasting, although the first two groups must endeavor to feed the poor in place of their missed fasting. Also exempt are pregnant women if they believe it would be harmful to them or the unborn baby, women during the period of their menstruation, and women nursing their newborns. A difference of opinion exists among Islamic scholars as to whether this last group must make up the days they miss at a later date, or feed poor people as a recompense for days missed. While fasting is not considered compulsory in childhood, many children endeavor to complete as many fasts as possible as practice for later life. Lastly, those traveling (musaafir) are exempt, but must make up the days they miss. Twelver Shi’a believes that those who travel more than 14 miles (23 km.) in a day are exempt.

On 1 May, Saudi Arabian authorities ordered the handover of 25 state-run schools to be run by private sector companies as part of economic reforms designed to ease pressure on the state’s finances. Riyadh announced recently that it aimed to generate 35 billion to 40 billion riyals ($9 billion to $11 billion) of non-oil state revenues from privatizations by 2020. The cabinet of ministers entrusted a supervisory committee for the education sector with the job of implementing the “Future Schools” initiative, without providing details. The initiative is part of the education ministry’s reform plans under Vision 2030, a wide-ranging program championed by Crown Prince Mohammed bin Salman to overhaul the economy of the world’s top oil exporter. The ministry announced in January a tender for a long-term concession to design, build, and finance and maintain facilities for 60 schools in Jeddah and Mecca, from kindergartens to secondary schools. In the past, the government built such infrastructure solely out of its own funds, but a drop in global oil prices in 2014 severely strained state finances, prompting authorities to seek the participation of private investors. (AFP 01.05)

The World Bank and Egypt have signed a $500 million agreement in order to reform the education system in Egypt. The agreement aims to improve the learning conditions at public schools of Egypt.

Egypt’s education system has long been criticized for its multiple shortcomings. For instance, teachers are always accused of their lack of skills and their significantly low wages. Public schools are also not well equipped with proper chairs and desks for students, besides being overcrowded. Minister of Education Tarek Shawky has recently been attempting to implement relevant change in the field of education through trying to incorporate new technologies in the system, including the Egyptian Knowledge Bank (EKB) and the use of electronic Tablets by students.

This five-year project aims to expand access to quality kindergarten for around 500,000 children, train 500,000 teachers and education officials while providing 1.5 million students and teachers with digital learning resources. In addition, more than 2 million students will benefit from the new student assessment and examinations system. The reform program aims to bring back learning to the classrooms through a comprehensive examination and student assessment system, along with improving the quality of education. (ES 22.04)

Turkey’s higher education institutions were attended by 7.56 million Turkish and international students during the 2017-2018 academic year, the country’s Council of Higher Education (YOK) announced. Some 4.24 million students attend undergraduate programs, while 2.77 million people studied in associate degree programs and 454,673 people were attempting to obtain a master’s degree, and 95,100 people are working towards a doctorate. Last year, the number of students in higher education was 7.2 million. Over 70% of 117,812 international students study at the undergraduate level.

Turkey’s higher education institutions comprises of 158,098 academics, of whom 24,640 are professors and 14,456 associate professors. Moreover, 3,121 foreign academics, including 209 professors, also give lectures in Turkish institutions. Daytime/formal education has been free of any fees for higher education since 2012. The country has 112 state and 74 foundation universities and vocational schools. (AA 28.04)

Higher education in Greece is entering a new era with the introduction of the country’s first English-taught four-year undergraduate program at a state university, which will be organized by the University of Athens and the International Hellenic University in Thessaloniki, northern Greece. The program will be dedicated to the study of the country’s greatest assets – archaeology, history, the Greek language and literature – and the aim is to attract students from beyond the European Union.

The BA Program in the Archaeology, History and Literature of Ancient Greece will be offered as of the next academic year at Athens University’s School of Philosophy. It will run for eight semesters over four years and be equal to all other bachelor’s degrees in Greece and elsewhere. Classes will be specially designed, while the professors will include Philosophy School educators, as well as distinguished academics from other institutions. The curriculum will also include seminars, educational activities and fields trips to archaeological sites and other locations of interest, as well as student participation in excavations. The program will take up to 100 students a year, with annual tuition fees set at €8,000.

The participation of the International Hellenic University is also considered significant as it is the first time this institution will branch into an English-taught bachelor’s degree; it currently offers master’s degrees in English. The program will soon be presented to the embassies of China, the United States and India, among others, while it is also expected to attract interest from other universities in Greece with a view to designing similar degrees. (eKathimerini 01.05)

Cannabics Pharmaceuticals announced the receipt of a Notice of Allowance from The Patent Office of the State of Israel. The Patent Office intends to grant Cannabics the patent for its method of high throughput screening of cancer cells. The patent encompasses the technology required to produce data on the interaction between different cannabinoids and cancer cells. The high throughput screening tests the effects of a multitude of compounds derived from the cannabis plant on cancer cell lines and biopsies. Data compiled from the patented technology will provide valuable insight into personalized treatments for cancer patients and will support the discovery of new, active pharmaceutical ingredients for specific cancers. Ultimately, the data could allow practitioners to precisely tailor cannabinoid therapies to an individual patient’s profile and type of cancer.

Over $100 million was invested in licensing Israeli medical marijuana patents over the past two years, and the global market for medical marijuana is estimated to reach $50 billion by 2025. Cannabics Pharmaceuticals is a US-based public company that is developing cannabinoid diagnostic tests for the personalized treatment of cancer. The company’s R&D is based in Caesarea, Israel, where it is licensed to conduct scientific and clinical research on harnessing the therapeutic properties of cannabinoid formulations. (Cannabics 18.04)

8.2 Kalytera Issued Patent for Use of CBD for the Treatment of Graft Versus Host Disease

Kalytera Therapeutics announced that the U.S. Patent and Trademark Office (USPTO) issued U.S. Patent No. 9,889,100 B2 with claims covering the use of cannabidiol (CBD) for the treatment of severe and refractory graft versus host disease (GVHD). Kalytera has exclusive worldwide rights to this issued patent through an Exclusive License Agreement with MOR Research Applications Israel.

In November 2017, Kalytera announced that it had received notice from the USPTO that the application for this patent would be allowed. The issuance of this patent by the USPTO is the final step in the patent application process, and provides patent coverage to Kalytera for the use of CBD in the treatment of GVHD through April 2034 under the Exclusive License Agreement with Mor.

CBD is a non-psychoactive cannabis compound that possesses therapeutic potential across a broad range of diseases and disorders, and is being evaluated by Kalytera and other companies for treatment of several diseases and disorders other than GVHD. Kalytera’s work with CBD in the treatment of GVHD is expected to be the first of several programs the Company will undertake to investigate and commercialize this important compound. Kalytera’s ongoing Phase 2 clinical program evaluating the use of CBD in the prevention of GVHD is expected to be completed later this year, at which time Kalytera will begin preparations for the pivotal Phase 3 study that will be required for FDA approval. Kalytera also expects to initiate an additional Phase 2 clinical study in treatment of GVHD later this year.

Katzrin’s Kalytera Therapeutics is pioneering the development of a next generation of cannabinoid therapeutics. Through its proven leadership, drug development expertise, and intellectual property portfolio, Kalytera seeks to establish a leading position in the development of novel cannabinoid medicines for a range of important unmet medical needs, with an initial focus on graft versus host disease and the treatment of acute and chronic pain. (Kalytera 19.04)

8.3 First Government-Hosted Medical Cannabis Conference Held in Israel

Israel’s Ministries of Agriculture and of Health host the first government-backed conference on medical cannabis on 23 – 25 April in Kfar Maccabia in Ramat Gan. Dubbed Cannaan – a combination of cannabis and Canaan, the biblical name of the region – the four-day conference included speeches by Israeli Minister of Agriculture Ariel, the Head of the Israeli Medical Cannabis Agency at the Israeli Ministry of Health and Professor Raphael Mechoulam, the “father” of Israeli medical cannabis research. The event also ran sessions and panels on topics such as regulation, hi-tech agriculture, R&D, recent clinical studies, and the development of cannabis-based treatments and medicine. (NoCamels 22.04)

Datum Biotech announced the founding of Datum Orthobiologics, to focus on creating advanced biomaterials for orthopedics based on proven bone formation and tissue regeneration solutions. These bio-programmable medical devices are designed to contribute to long-term healing and regeneration of musculoskeletal components. Datum Orthobiologics will concentrate its initial efforts on bone graft products. The unique ossification properties of Datum’s products make them ideal new entrants for spine fusion and fracture grafts in trauma. The Company is currently in a round of fund-raising.

Affiliated with Datum Biotech, Datum Orthobiologics benefits from proven and patented GLYMATRIX technology, as well as decades of know-how and industry experience. Products featuring GLYMATRIX technology have been used safely and effectively in over half a million clinical dental and aesthetic procedures, and are trusted by medical professionals around the globe.

Har Adar’s Datum Orthobiologics was founded to provide innovative orthopedic ossification, bone formation and tissue regeneration solutions. They develop advanced biomaterials designed to improve long-term healing and regeneration of musculoskeletal components. Datum Orthobiologics is affiliated with Datum Biotech, benefiting from GLYMATRIX® technology and other patented technologies.

Ness Ziona’s Datum Biotech was founded in 2012. The Company’s proprietary technology (GLYMATRIX) is based on over 25 years of research, development, manufacturing and post-marketing research, as well as IP re-acquired from Johnson & Johnson. Commercially used in dental and aesthetic applications, over half a million procedures have been performed, with over 110 scientific publications and numerous case studies. (Datum Orthobiologics 24.04)

8.5 VGS Initiates U.S. Trial to Evaluate the Use of Its VEST Technology for Bypass Surgery

Vascular Graft Solutions (VGS) announces on enrollment of the first 20 patients into the VEST US pivotal trial that will evaluate the safety and effectiveness of the VEST, a novel external support device for treatment of saphenous vein graft disease after coronary artery bypass grafting (CABG).

The VEST trial is being conducted in the United States under an FDA Investigational Device Exemption (IDE) and under the auspices of the NIH-sponsored Cardiothoracic Surgical Trials Network (CTSN), a nation-wide network of premier cardiac surgical centers who collaborate to design and conduct the most important clinical trials in cardiac surgery.

VGS is a privately held company located in Tel Aviv, Israel. The company develops novel solutions in the field of cardiovascular surgery. VEST and FRAME, are CE marked external support devices for treatment of saphenous vein grafts in coronary and peripheral bypass procedures respectively. VEST device targets the root causes of vein graft failure. The device underwent several randomized trials in leading heart centers in Europe, was implanted successfully in more than 1,000 patients and is commercialized in several EU countries. (VGS 23.04)

8.6 Korean Fund KIP to Invest in Enlivex Therapeutics at $100 Million Value

Enlivex Therapeutics announced signing of a memorandum of understanding (MoU) for a $10 million investment led by South Korean investment fund KIP at a company value of $100 million, after money. KIP led an $8 million financing round in Enlivex at a company value of $50 million, before money, in September 2017. According to the MoU, KIP will invest $2 million, Hadasit Bio-Holdings will invest $1.2 million, and the two concerns will help recruit additional investors for Enlivex. Under the terms of the MoU, the investment will take place if an additional sum of at least $6 million more is raised. Hadasit, which has a 19.2% stake in Enlivex before the new investment, has a NIS 45 million market cap.

Enlivex’s product has not yet undergone Phase III clinical trials. According to the company’s statement during its September 2017 financing round, the product can enter these trials within a year.

Jerusalem’s Enlivex‘s product reduces the immune system’s activity. In graft-versus-host disease, the new immune system transplanted into the patient is liable to attack the patient’s body, which is identifies as a foreign object. Its activity must therefore be controlled until it becomes accustomed to its new environment. Enlivex said that it would continue development of the product for other diseases linked to unwanted activity by the immune system. (Globes 23.04)

Global crop protection company ADAMA today announced that is ready to launch its distinctive fungicide, CRONNOS, in Brazil, the world’s largest soybean market. A final regulatory approval from the Agricultural Ministry is expected in the coming days. CRONNOS is a unique three-way mixture fungicide for soybean rust, including a multisite protectant. Its liquid formulation, CRONNOS TOV provides effective protection for soybean diseases, saves time for growers by strongly adhering to the plants’ leaves and preventing spray nozzles from clogging. Its flexibility provides farmers with further benefit by being able to apply the fungicide at any time during the plant’s development.

The launch of CRONNOS, together with the recently launched NIMITZ in Brazil, is expected to bring highly effective and safe solutions to farmers, and to make a significant contribution to the growth of ADAMA.

Airport City’s Adama Agricultural Solutions, together with Hubei Sanonda, is one of the world’s leading crop protection companies. They offer farmers effective products and services that simplify their lives and help them grow. With one of the most comprehensive and diversified portfolios of differentiated, quality products, their 6,600-strong team reaches farmers in over 100 countries, providing them with solutions to control weeds, insects and disease, and improve their yields. (Adama 25.04)

8.8 BGU New Breath and Urine Tests Detect Early Breast Cancer More Accurately

A new method for early and accurate breast cancer screening has been developed by researchers at Ben Gurion University and Soroka University Medical Center in Beer Sheva, using commercially available technology. The researchers were able to isolate relevant data patterns to more accurately identify breast cancer biomarkers using two different electronic nose gas sensors for breath, along with gas-chromatography mass spectrometry (GC-MS) to quantify patterns of substances found in urine. In their study, researchers detected breast cancer with more than 95% average accuracy using two different commercial electronic noses (e-nose) that identifies unique breath patterns in women with breast cancer. In addition, their revamped statistical analyses of urine samples submitted both by healthy patients and those diagnosed with breast cancer yielded 85% average accuracy.

Mammography screenings, which are proven to significantly reduce breast cancer mortality, are not always able to detect small tumors in dense breast tissue. In fact, typical mammography sensitivity, which is 75 to 85% accurate, decreases to 30 to 50% in dense tissue. Current diagnostic imaging detection for smaller tumors has significant drawbacks: dual-energy digital mammography, while effective, increases radiation exposure, and magnetic resonance imaging (MRI) is expensive. Biopsies and serum biomarker identification processes are invasive, equipment-intensive and require significant expertise. (BGU 25.04)

8.9 Kanabo Research Signed an Agreement with Constance Therapeutics from the US

Kanabo Research, which develops clinical solutions for extraction and vaporization of medical cannabis, announces it is entering an agreement with Constance Therapeutics, a US-based medical cannabis extraction company. According to the agreement, both companies will operate in the EU to establish a cannabis cultivation farm as well as manufacturing capabilities of cannabis active compounds – THC and CBD – to be used in an array of medical treatments and chronic ailments such as insomnia, PTSD and chronic pain. Simultaneously, Constance Therapeutics will market Kanabo Research’s solutions in the US market where Constance Therapeutics has been operating since 2008.

Kanabo Research has seen significant momentum in the last few months. Recently, the company received initial approvals from Israel’s Ministry of Health to use cannabis with its proprietary VapePod vaporizer. Similarly, the company has commenced pre-clinical trials of Kanabo’s proprietary formulations that focus on sleep disorders and in the future for patients suffering from PTSD.

Ness Ziona’s Kanabo Research conducts research and development of medical cannabis extraction and vaporization solutions. Kanabo’s vaporization device – VapePod – allows patients to inhale natural cannabis and increase effectiveness without any smoke. Similarly, the device, which is patent protected, lets patients monitor the dosage precisely and over time. Kanabo’s extraction pods, which are based on extensive medical trials and in cooperation with leading doctors in Israel and around the world, provide treatments that target central nervous system disorders affecting sleep, anxiety and chronic pain. (Kanabo Research 25.04)

8.10 V-Wave Closes $70 Million Financing to Support Study of its Heart Failure Therapy

V-Wave has closed a Series C financing of $70 million led by Deerfield Management along with participation from new investors – healthcare funds Endeavour Vision, Quark Venture and Aperture Venture Partners. All of V-Wave’s existing major investors are also participating in this round, including strategic investors Johnson & Johnson Innovation (JJDC Inc.) and Edwards Lifesciences, along with BRM Group, Pontifax, Pura Vida Investments, TriVentures, BioStar Ventures and Israel Secondary Fund.

Having received approval from the FDA to initiate a pivotal IDE study, V-Wave also announced the upcoming launch of its global, randomized, controlled, double-blinded multicenter clinical trial – the RELIEVE-HF study – evaluating the safety and effectiveness of its novel device therapy in HF patients with Class III or ambulatory Class IV symptoms with preserved or reduced ejection fraction already receiving optimal therapies.

Caesarea’s V-Wave is focused on developing percutaneous implantable devices for treating patients with chronic Heart Failure (HF). As a leading cause of death and hospitalization, HF continues to affect millions of people worldwide. V-Wave’s vision is to help patients who remain with disabling symptoms or need hospitalization despite optimized medical treatment. V-Wave has developed a proprietary interatrial shunt intended to relieve symptoms, reduce hospitalization, increase exercise capacity and improve the overall quality of life. (V-Wave 26.04)

8.11 Kadimastem Enrolls First Patient for Its Clinical Trial in ALS Patients

Kadimastem announced the enrollment of the first patient for its clinical trial in ALS patients, using the cell therapy product developed by the company, AstroRx. The phase I/IIa clinical trial is being conducted by the Department of Neurology of the Hadassah Ein Kerem Medical Center in Jerusalem and it is expected to include 21 patients. The objective of the trial is to evaluate the safety and efficacy of AstroRx in patients. Interim results of the trial are expected within the coming year.

AstroRx is an innovative cell-based treatment for ALS, which consists of brain supporting cells (astrocytes), designed to replace the astrocytes whose functionality was damaged in ALS patients. AstroRx is manufactured by Kadimastem from pluripotent stem cells using a unique technology developed by the company. Currently, there are only two FDA-approved drugs for the treatment of ALS, and they are only able to slightly slow down the progression of the disease. The advantage of AstroRx is in replacing the patient’s malfunctioning astrocytes with healthy cells. AstroRx has several mechanisms of action protecting the damaged motor neurons simultaneously, as opposed to currently available treatments which use a single mechanism. The unique properties of AstroRx are expected to significantly slow down the progression of the disease, as demonstrated by the company in its pre-clinical trials.
Ness Ziona’s Kadimastem is a clinical stage biotechnology company that develops industrial regenerative medicine therapies based on differentiated cells derived from Human Embryonic Stem Cells (hESCs) to treat neuro-degenerative diseases such as ALS, as well asDiabetes. (Kadimastem 26.04)

8.12 Helsinn, Bio Capital and Windham Support Commercialization of NovellusDx

NovellusDx announced it has completed an equity financing of $6 million. The financing round is with the participation of Helsinn Investment Fund S.A. SICAR, part of Helsinn Group, a leading cancer care company, Bio Capital Impact Fund, and Windham Venture Partners. This adds to the nearly $17 million already raised by the company.

Jerusalem’s NovellusDx’s mission is to provide functional information about mutations and their responses to drugs so that oncologists can treat patients with precision therapies and bio-pharmaceutical companies can develop drugs more effectively. The NovellusDx approach is to monitor the functional effects of mutations and observe the effects of drugs, drug combinations and drug candidates on the activity level caused by the mutations. (NovellusDx 30.04)

Body Vision Medical has received clearance from the U.S. FDA to market their LungVision Tool. The LungVision Tool is an affordable lung navigation catheter with superb maneuverability. The LungVision Tool is used in conjunction with standard bronchoscopes and the LungVision System to guide endotherapy accessories to small pulmonary nodules. This approval clears the way for Body Vision Medical to accelerate commercialization efforts for its revolutionary LungVision Platform for pulmonary specialists across the U.S., providing an affordable and effective real-time solution for early-stage lung cancer diagnostics and treatment procedures.

The LungVison Imaging and Navigation System was cleared by the FDA in May 2017 and has been successfully used in over 290 clinical procedures in 10 leading lung cancer centers across the U.S.

Ramat HaSharon’s Body Vision Medical is a software and medical device company specializing in augmented real-time imaging, artificial intelligence and intra-body navigation. The company was founded in 2014 to address the contemporary unmet clinical need of early lung cancer diagnostics and treatment. (BVM 30.04)

BGN Technologies, the technology transfer company of Ben-Gurion University, announced that researchers at Ben-Gurion University of the Negev (BGU) are developing a new, single-dose fertility treatment based on a new telomerase-activating compound, which could improve both male and female fertility.

The new treatment stimulates the expression of the telomerase, the enzyme that is responsible for maintenance of telomeres, DNA sequences at the tip of a chromosome that affect the life span of cells in general and contribute to infertility. The novel treatment re-elongates the telomeres and protects cells from damages, thereby increasing cell viability and increasing the likelihood of fertilization and embryo generation and implantation. The treatment is applied as a single dose and dissipates within 24 hours. The compound was tested on mice, and showed no toxic effects in animal studies.

BGN Technologies is the technology transfer company of Ben-Gurion University, Beer Sheva. BGN Technologies brings technological innovations from the lab to the market and fosters research collaborations and entrepreneurship among researchers and students. To date, BGN Technologies has established over 100 startup companies in the fields of biotech, hi-tech, and cleantech and has initiated leading technology hubs, incubators, and accelerators. (BGU 30.04)

Biomica, a subsidiary of Evogene, announced its focus on the development of therapies for antibiotic resistant bacteria, Immuno-Oncology and GI related disorders. Biomica leverages a tailored CPB platform tool-set to identify and characterize disease related changes in the human microbiome, and to develop novel therapeutics based on these understandings. Over the past year, significant efforts and investments were made to develop proprietary predictive computational tools and data sets to analyze changes in the gut microbiome related to human health, and to develop novel therapeutics.

Rehovot’s Evogene is a leading biotechnology company developing novel products for major life science markets through the use of a unique Computational Predictive Biology (CPB) platform incorporating deep scientific understandings and advanced computational technologies. This platform is utilized by the Company to discover and develop innovative ag-chemical, ag-biological and ag-seed products (GM and non GM), and by two subsidiaries; Evofuel, focused on castor seeds, and Biomica, focused on human microbiome therapeutics. (Evogene 01.05)

MiFID II, which went into effect on 3 January, requires firms to monitor communications and transactions for Market Abuse and sets a higher bar for High Frequency Trading, requiring such trading activity to be monitored at the microsecond level. Firms that do not comply with this stipulation risk fines, or worse, reputational damage if market abuse goes undetected. To address this, NICE Actimize, a leader in Autonomous Financial Crime Management, has enhanced its Market Surveillance Solution to help firms comply with the MiFID II microsecond requirement, while improving firms’ ability to detect and mitigate market abuse.

The NICE Actimize Markets Surveillance solution provides comprehensive surveillance capabilities to enable global regulatory compliance across products and markets. The solution’s proven analytics and flexible data architecture allow banks to benefit from fully automated surveillance and end-to-end workflow management, investigation and auditing capabilities, reporting and dashboards. The solution can be deployed on premise (Markets Surveillance Enterprise) or in the cloud (Markets Surveillance Cloud). Fifty-five banks, including eight of the ten largest banks (based on assets under management) rely on NICE Actimize’s Markets Surveillance Solution for their global regulatory compliance needs.
Ra’anana’s NICE is the worldwide leading provider of both cloud and on-premises enterprise software solutions that empower organizations to make smarter decisions based on advanced analytics of structured and unstructured data. (NICE 17.04)

9.2 ECI & A2D to Improve Connectivity in Underserved Communities in the US

ECI and Atlanta’s A2D, an open access Competitive Local Exchange Carrier (CLEC) that is building a terabit, open access fiber network announced a partnership. The partnership facilitates A2D implementations of service provider neutral fiber networks within distressed areas, improving connectivity and enabling citizens to leverage the network to stimulate economic development and improve social services via telehealth, distance learning, workforce training and smart utility access. A2D utilizes ECI solutions to build and operate private networks for school districts, city governments and municipal government authorities such as water works and transportation systems. Led by ECI’s Apollo family of optical transport and switching platforms and the Neptune line of packet systems with integrated optics, all managed under ECI’s user friendly network managements system.

Petah Tikva’s ECI is a global provider of ELASTIC network solutions to CSPs, critical infrastructures as well as data center operators. Along with its long-standing, industry-proven packet-optical transport, ECI offers a variety of SDN/NFV applications, end-to-end network management, a comprehensive cybersecurity solution, and a range of professional services. ECI’s ELASTIC solutions ensure open, future-proof, and secure communications. With ECI, customers have the luxury of choosing a network that can be tailor-made to their needs today while being flexible enough to evolve with the changing needs of tomorrow. (ECI 18.04)

Sapiens International Corporation has entered into a partnership with EasySend, an insurtech company offering a SaaS-based Digital Transaction Management (DTM) platform for smart and digital forms. EasySend’s DTM will integrate with the Sapiens Digital Engagement Suite across Sapiens’ Life, Pension and Annuities and Property and Casualty/General Insurance platforms and will enable insurers to rapidly transform forms and documents into a customer-driven, digital experience that can be used via multiple channels and devices. The platform fully integrates with third-party applications and any hosting architecture, to automate most insurer interactions with customers. Companies can receive and send digital forms on any PC, tablet or mobile device, on- and off-line.

Holon’s Sapiens International Corporation is a leading global provider of software solutions for the insurance industry, with a 30-year track record of delivering to more than 400 organizations. The company offers software platforms, solutions and services, including a full digital suite, to satisfy the needs of property and casualty/general insurers, and life, pension and annuity providers. Sapiens also services the reinsurance, workers’ compensation, financial and compliance, and decision management markets.
The company’s portfolio includes policy administration, billing and claims, underwriting, illustration and electronic application. The digital suite features customer and agent portals, and a business intelligence platform. (Sapiens 23.04)

Kovrr equips insurers with advanced cyber risk modeling capabilities, relying on its actionable global threat intelligence stream, advanced machine learning, artificial intelligence and real-time risk modeling. The company has been founded and led by three veterans of the Israeli intelligence corps, with multidisciplinary experience and unique expertise in the cyber domain. Kovrr recently successfully graduated from Accenture’s Fintech Innovation Lab London program and was the only InsurTech company to present on the graduation day.
Tel Aviv’s Kovrr (formerly myDRO) empowers P&C insurers and reinsurers to cope with the dynamic cyber risk environment. With Kovrr’s predictive cyber risk modeling platform, carriers can wisely select who they indemnify and continuously monitor their cyber exposures. (Kovrr 23.04)

RADWIN announced that Peoples Wireless – a subsidiary of the Peoples Telephone Cooperative in Texas, U.S. – has deployed the RADWIN JET PRO 750 Mbps and JET AIR 250 Mbps Point-to-Multipoint beamforming solutions and RADWIN 2000 D+ Point-to-Point in its network. RADWIN’s portfolio delivers high-speed broadband to residential and enterprise customers (e.g. banks, school campuses, public water companies) that reside in areas not served by the company’s traditional DSL and fiber services. Using RADWIN’s gear, Peoples Wireless can offer a variety of service packages for residential and enterprise customers of up to 100 Mbps.

Tel Aviv’s RADWIN is a leading provider of Point-to-Multipoint and Point-to-Point broadband wireless solutions. Deployed in over 170 countries, RADWIN’s solutions power applications including backhaul, broadband access, private network connectivity, video surveillance transmission as well as delivering broadband on the move for trains, vehicles and vessels. (RADWIN 24.04)

InfiniDome, the GPS Cyber Company, announced a collaboration agreement with a US based system integrator, which provides fleet management solutions to Latin American and US truck fleets. The collaboration includes the integration of its GPSdome technology within the fleet management tracking unit. The new solution will protect against GPS jamming and spoofing attacks, as well as report such attacks back to the control center.

Caesarea’s InfiniDome developed a cyber protection solution against jamming and spoofing for GPS-based systems, such as Asset-Tracking applications, autonomous vehicles, UAVs, homeland security, smart city and timing systems. Its competitive advantages are its minimal SWaP (size, weight and power consumption), and an affordable price comparing to existing solutions developed for military applications that require military export license. The company’s cyber solutions have been successfully proven in the field, and are commercially available globally. (InifiniDome 24.04)

9.7 SQream and Thailand’s Largest Mobile Operator Collaborate to Improve Service & Operations

SQream, developer of SQream DB, the fastest GPU database technology for tackling massive data stores, has announced a partnership with Thailand’s top mobile operator AIS to leverage SQream’s GPU-powered analytics technology to significantly reduce analysis time and costs, while improving AIS’s network operations and marketing effectiveness. AIS, Thailand’s largest mobile operator with more than 40 million subscribers nationally, approached SQream with some familiar problems in the Big Data age: how to translate billions of records of disparate data for better network management and to use that data to improve their competitive advantage.

AIS implemented a Smart Benchmarking Dashboard which allows executive management to easily analyze and troubleshoot AIS network quality in multiple locations in just a few clicks. The analysis can include as many as nearly a billion data records from varied data sources integrated into a single view on the fly, taking only seconds with SQream DB using only a single server equipped with a single NVIDIA Tesla GPU. In addition, the system enables AIS to drill down for much deeper data analysis. For example, a complex query of Speed Test Data from different locations comprising hundreds of millions of raw data records took less than 50 seconds with SQream as compared to several minutes previously or up to an hour in some cases.

Tel Aviv’s SQream Technologies develops and markets SQream DB, a GPU database designed to enable unparalleled business intelligence from massive data stores. Global enterprises use SQream DB to analyze more data than ever before, while achieving improved performance, reduced footprint, significant cost savings and the ability to scale the amount of data they analyze to hundreds of terabytes and more. (SQream 25.04)

9.8 Magal Awarded $2.3 Million Contract to Protect Correctional Facilities in North America

Magal Security Systems has been awarded a $2.3 million contract for a perimeter and motion detection system. The system will be used to secure correctional facilities in North America and delivery is targeted to be completed in 2018. Yehud’s Magal is a leading international provider of solutions and products for physical and video security solutions, as well as site management. Over the past 45 years, Magal has delivered its products as well as tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries – under some of the most challenging conditions. Magal offers comprehensive integrated solutions for critical sites, managed by Fortis4G – our 4th generation, cutting-edge physical security information management system (PSIM). The solutions leverage our broad portfolio of home-grown PIDS (Perimeter Intrusion Detection Systems), Symphony – our advanced VMS (Video Management Software) with native IVA (Intelligent Video Analytics) security solutions. (Magal 26.04)

Rookout announced their launch and $4.2 million funding by TLV Partners and Emerge. Using Rookout, a company can tackle bugs and understand issues by collecting and pipelining data on-demand, without any need for coding, re-deploying or restarting their applications. Tackling a bug or an issue often means writing extra code, testing it, getting it approved, pushing it to production and then often discovering that it still didn’t produce the data needed to solve the problem. This makes bug-hunting and data-exploration a long and complicated process that consumes R&D resources.

Rookout solves this problem by letting dev teams set up ad-hoc rules inside their production code. These rules work like non-breaking breakpoints, collecting the required data without prior instrumentation. The application keeps running as normal, while the data is collected and then sent immediately to any destination such as alerting systems, monitoring, logging and analytics applications or any generic webhook. The collected data can also be viewed on Rookout’s IDE, allowing the user to close the loop within a single view.

Tel Aviv’s Rookout is the rapid production debugging solution which collects data on-demand from live code and pipeline it immediately to any destination, such as alerting and monitoring tools. With Rookout’s real-time instrumentation technology, a company can tackle bugs and issues without any need for coding, re-deploying or restarting the application. Rookout currently supports Python, JVM and NodeJS on all cloud environments, including serverless applications. (Rookout 26.04)

Siklu announced that its radios have been selected by Israel Police as their main wireless fiber solution. These systems were selected for nationwide deployments as well as temporary events for the purpose of backhauling HD video surveillance systems and advanced sensors.

Putting on a Gay Pride parade in Jerusalem, the holiest city in the world presented an additional challenge – how fast the city’s technology partners, MER Group, SMBIT and Siklu would be able to design, supply and install the very small mmWave radios at the strategic locations marked by the security experts.

The Israel Police, as police forces all over the world, face a considerable challenge when it comes to deploying a camera array at a city’s main centers within a short timeframe. Adding to the difficulties in securing these parades, is the legacy communication infrastructure in the old rock-based, mountainous terrain city of Jerusalem. When a wireless communication option is considered, the challenge of a dense urban environment packed with thousands of interfering Wi-Fi networks, needs to be addressed.

Operating in the abundant 70GHz band, with 5GHz of continues spectrum, Siklu’s radios were not constrained by the costly and time consuming frequency survey associated with legacy wireless solutions. At each location, the Police placed 2 HD cameras and simply deployed the Siklu radios back to back, eliminating the need for traditional multiple powering and switching devices. Simplified deployment was enabled by the Siklu EtherHaul radios with their integrated switch and dual PoE out. At each pole and rooftop along the parade route, a single EH-710TX radio was able to power the complete pack of cameras and radios. With these features and capabilities, the whole network was deployed in only 1 day.

Petah Tikva’s Siklu delivers multi-gigabit wireless fiber connectivity in urban, suburban and rural areas. Operating in the mmWave bands, Siklu’s wireless solutions are used by leading service providers and system integrators to provide 5G Gigabit Wireless Access services. In addition, Siklu solutions are ideal for Smart City projects requiring extra capacity such as video security, WiFi backhaul and municipal network connectivity all over one network. (Siklu 30.04)

Optibus announced the launch of its AI-driven OnTime optimization solution, empowering transit operators to greatly reduce delays and provide improved on-time service for passengers. OnTime is Cloud-based SaaS software that can be implemented by transit agencies in a matter of weeks. With proprietary algorithms that analyze masses of data created during daily transit operations, Optibus helps transit planners determine the combination of parameters that impact on-time performance including rush hour traffic, driver behavior, and vehicle type. The system collects and analyzes historical operational data from GPS systems and other external sources to detect potential delays and present alternative scenarios for scheduling changes and vehicle and labor resource allocation. The platform also identifies the cost implications of these changes to create a transit plan which is both cost effective and punctual, enabling transit planners to make better informed business decisions.

Operating since 2014, Tel Aviv’s Optibus is the leading vendor of city-wide mass transportation planning and operation. By leveraging the power of machine-learning and optimization algorithms, Optibus redefines the way mass-transportation is planned and operated. The company’s cloud platform is in use by leading transit providers in over 200 cities worldwide, helping them improve quality of service, increase efficiencies, save money, and streamline their operations. (Optibus 01.05)

On 17 April, the IMF released a revised global economic forecast that stated Israel’s economy is forecast to by grow 3.3% in 2018 and 3.5% in 2019. The IMF predicts inflation will rise from 0.2% in 2017 to 0.7% in 2018 and 1.3% in 2019. The IMF also believes that unemployment will remain stable at 4.2% over the next two years, while the balance of payments will continue to be positive, with surpluses of 2.6% of GDP in 2018 and 2.7% in 2019. The IMF’s optimistic forecast for the Israeli economy fits in with its global forecast, which predicts that the global economy will grow by a fairly rapid 3.9% both this year and next year.

In its global forecast, the IMF says that the developed economies will grow faster than their long-term growth potential, thereby narrowing the gap between output and production capacity, especially in Europe. Employment will also be higher than what is regarded as full employment in the US. In Asia and the emerging European markets, growth should be strong, while countries that export commodities and raw materials will benefit from higher demand and exports over the next two years. (IMF 17.04)

Figures released by the Central Bureau of Statistics on 30 April show that the unemployment rate fell from 3.8% in February to 3.6% in March. Unemployment averaged 3.7% in Q1/18, compared with 4.1% in the Q4/17. The drop in unemployment in the 25 – 64 age bracket was even more impressive, with unemployment falling from 3.6% in Q4/17 to a mere 3.2% in Q1/18. The labor force participation rate dipped from 64% in the fourth quarter of 2017 to 63.8% in the first quarter of 2018. The employment rate among those over 15 fell from 61.8% in February to 61.3% in March. (CBS 30.04)

Israel accounted for the second-largest number of cybersecurity deals globally, behind the US and ahead of the UK, a new report compiled by New York data firm CB Insights shows. The report shows that Israel accounted for 7% of the cybersecurity global deal share in 2013 – 2017, still way behind the US, which accounted for 69% of the global deal share, but higher than the UK, which accounted for 6% of the pie. Canada accounted for 3% and China for 2% of the global deal share, the report showed.

The report selects 29 cybersecurity startups — which it calls cyber defenders — who are early- to mid-stage “high-momentum companies pioneering technology with the potential to transform cybersecurity,” the report said. Out of these, six are Israeli firms, ranking the so-called Startup Nation with the second-highest concentration of cyber defenders, after the United States.

The Israeli firms that made the list are: BioCatch, a startup that analyzes behavioral and physiological parameters to help with fraud prevention and detection; Aqua Security, which enables enterprises to secure their virtual container environments and bridges the gap between DevOps and IT security; IRONSCALES, a maker of anti-phishing technologies; and D-ID, which has developed a technology to help enterprises protect users’ faces from unauthorized, automated face recognition technologies. Israel’s Minerva Labs which makes cybersecurity products designed to defeat advanced malware, and Cylus, which helps railway companies detect cyber-attacks in their operational network, including their signaling systems and trains — and block attackers before they can cause any damage, are also among the six.

The report said that of the 26 companies selected for its 2018 cyber defenders report, 62% of them have their headquarters in the US, mostly in California. The next highest concentration of cyber defenders is located in Israel, followed by the UK with three. Sweden and the Netherlands have one each. Three Israeli firms were mentioned in the CB Insights cybersecurity report last year. (ToI 15.04)

Food prices in Israel are 5.5% lower than their peak prices in 2013 and 2015 due to increased competition between food retail chains – according to a survey published on 29 April by the Ministry of Finance Chief Economist. The detailed analysis stresses the fall in profitability of Rami Levy Chain Stores Hashikma Marketing 2006 and Victory Supermarket Chain following their rapid expansion and also mentions a fall in profitability at Shufersal.

The Ministry of Finance also observed that the fall in food prices comes alongside the rise in average salaries and thus a boost in purchasing power. The report says that Israel’s average salaries rose by 5% between Q4/15 and Q4/17, so that in recent years there has been a major rise in the purchasing power of households regarding food products. Over the same period, the report says that food prices rose in Europe. An analysis of the trend found that since 2014, food prices in Israel have fallen while rising 10% in Europe.
However, despite the fall in food prices in Israel, the report found that food purchases represented 13.3% of household expenditure in 2015 and 14.2% of household expenditure in 2016. This rise might mean that people are simply buying bigger quantities of food, or more luxury items. (Globes 29.04)

The Central Bureau of Statistics announced on 23 April that 1,622 new housing units were sold in Israel in February 2018, 7% lower than the 1,747 sold in January 2018, 10% lower than the 1,808 sold in December 2017 and 18% lower than the 1,978 sold in February 2017. There were 22,855 housing units for sale in February, down slightly from 23,246 in January. This figure, which the Central Bureau of Statistics resumed reporting this year after a one-year gap, is downwardly biased, because it includes only privately initiated construction, while excluding publicly initiated housing. The number of homes for sale by contractors is therefore probably higher.

In three-month periods calculated by the Central Bureau of Statistics, 5,180 new homes were sold in December 2017-February 2018, 2.9% more than in September-November 2017. In seasonally adjusted figures, however, the number of new homes sold was down 7.8%. The Central Bureau of Statistics also reported that the number of new homes sold fell 20.4% in March 2017 – February 2018, compared with March 2016-February 2017. (CBS 23.04)

On 30 April 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Israel and considered and endorsed the staff appraisal without a meeting.

Israel is enjoying strong economic growth, at 3.4% in 2017, supported by solid domestic demand and higher global growth. Unemployment has declined steadily, to below 4% in early 2018, supporting broad-based wage growth. Nonetheless, inflation remains below the 1 – 3% target range of the Bank of Israel (BoI), reflecting the appreciation of the shekel, increased competition including internet shopping and government measures to lower the cost of living. The BoI has held the policy rate at 0.1% since February 2015 and has stated that monetary policy in Israel will remain accommodative as long as necessary to entrench inflation within the target range. Israel’s fiscal deficit was 2% of GDP in 2017 – but 2.9% excluding one-off revenues – and public debt declined to 61% of GDP.

Israel’s growth is expected to reach about 3.4% in 2018 and remain around this level in the next few years owing to the completion of major projects. Domestic and international conditions are supportive of an increase in inflation, yet significant uncertainty remains around the timing of such a rise. Housing price increases have slowed to only 2% alongside a decline in turnover, but housing affordability remains a problem. In the longer term, however, Israel faces challenges to growth and stability from modest productivity growth despite its dynamic high-tech sector, sizable infrastructure needs that are especially evident in high traffic congestion, as well as high poverty partly reflecting the lower skills and labor participation of population groups that will rise as a share of the working age population in coming decades.

Israel’s strong macroeconomic conditions offer an opportunity to implement further reforms to sustain strong and inclusive growth. Growth of almost 3.5% in 2017 helped bring unemployment below 4%. But core inflation remains below the 1 – 3% target range. Growth is expected to remain at about 3.5% in the next few years thanks in part to the completion of major projects, before moderating to around 3%. But in the longer term, a rise in population share of groups with lower labor productivity and participation combined with sizable infrastructure needs could weigh on Israel’s growth potential and raise poverty.

Monetary policy should remain accommodative pending a durable rise in inflation and inflation expectations. The BoI maintained an appropriately accommodative stance in 2017 given low inflation and the spillovers from easy monetary policies in major advanced economies. The BoI’s guidance that policy will remain accommodative as long as necessary to entrench the inflation environment within the target range has also helped anchor long term inflation expectations. Yet, with expectations for the next few years below or close to the lower target bound, policy tightening should wait until inflation is clearly heading back to target, with the pace of eventual rate hikes being data driven. The external position is broadly in line with fundamentals and desirable policy settings. Given comfortable foreign reserves and with the economy at full employment, exchange rate flexibility should continue to be the first line of defense in the event of external shocks, with foreign exchange intervention limited to addressing disorderly market conditions, which may arise from significant exchange rate deviations from fundamentals.

Reinforcing the financial stability framework is critical to complement the progress being made on enhancing competition. Measures being implemented by the authorities are expected to strengthen competitive pressures. Already, the sources of credit are shifting, making it urgent to approve legislation to establish the FSC to avoid gaps in financial system oversight. Entry by new banks would be welcome, with appropriate deposit insurance and resolution arrangements to contain fiscal costs from potential failure. Banking supervision should continue its efforts to operationalize a risk-focused approach and the adoption of Solvency II by the CMISA is welcome. Financial regulators should harmonize regulations in areas of overlapping activity to avert regulatory arbitrage. Safeguarding the operational independence of financial regulators remains critical to their effectiveness. Slowing housing construction despite still high housing prices calls for continued reforms to make supply more responsive to needs and to improve housing affordability.

Fiscal policy should support Israel’s growth potential while building buffers. In 2018, fiscal reserves are allocated to welcome subsidies for after-school childcare, but an expansion of disability benefits should be coupled with a reform of eligibility requirements and testing for new entrants to protect labor participation and contain fiscal costs. The 2019 budget supports technical training in schools and expands the EITC, but adhering to the former deficit target of 2.5% of GDP is preferable to gradually reduce debt in normal times. Ensuring the Buyer’s Price program is temporary would also support Israel’s fiscal health.

Stronger public investment management would help address infrastructure needs and adequate fiscal buffers must be preserved. The development of an integrated long-term national infrastructure strategy through 2030 is welcome. An immediate priority is to ensure that the existing infrastructure is efficiently utilized through demand management tools. The framework for managing infrastructure investment needs to be strengthened to ensure investments are high quality and timely. If public investment is increased, any rise in the public debt ratio should be modest and temporary, with liabilities from PPPs managed carefully and reported in line with international best practices. The low level of Israel’s civilian spending, together with reform needs in education, training, and active labor market policies, indicate that revenues should be the main source of non-debt financing, focusing on reducing tax benefits to limit the drag on growth.

Fundamental upgrades of the business environment are critical, especially reducing bureaucratic bottlenecks. Progress on electricity sector and other reforms is welcome and reforms should continue, including replacing trade barriers on agricultural products with targeted subsidies. Numerous regulations and their high compliance costs remain major impediments to competition and investment, calling for simple and timely administration of regulations, such as a “one-stop shop” that would assess all regulatory requirements within a reasonable period. All proposals for new regulations should be subject to robust regulatory impact assessments. The lengthy process of contract enforcement indicates a need to make court procedures more efficient, and the establishment of a specialized court for complex antitrust cases would support competitive markets.

The government should undertake deep reforms of education and training to reduce the gaps in labor productivity and participation while enhancing redistribution carefully. The effectiveness of schools should be increased, such as through higher standards for teachers, covering core subjects at all grades in Haredi schools, improving Hebrew teaching in Arab schools and extending the short school day. Enhanced vocational training can also play a large role in reducing skills gaps with expanded active labor market policies further aiding employability. To raise labor participation and work hours of women, childcare support needs to be further expanded, especially for younger children, and increases in the female retirement age should continue without introducing new incentives for early retirement. Alongside enhancing public transportation, enabling workplaces to locate near communities would promote labor participation. Inequality and poverty can be reduced while supporting participation by substantially expanding the EITC and implementing it more effectively, with fiscal costs contained by making transfers more targeted.

It is proposed that the next Article IV consultation with Israel take place on the standard 12-month cycle. (IMF 01.05)

The Central Bureau of Statistics announced that in March 2018, imports of goods (gross, excluding diamonds) totaled NIS 21.3 billion. Some 46% were imports from the EU countries, 26% from the Asian countries, 11% from the USA and 17% from the “Other Countries”.

Exports of goods (gross, excluding diamonds) totaled NIS 15.7 billion and the trade deficit of goods (excluding diamonds) totaled NIS 5.6 billion. 33% of the exports were to the EU countries, 24% to the USA, 24% to the Asian countries and 19% to the “Other Countries”.

The trade deficit of goods (excl. diamonds) with the Asian countries totaled NIS 4.5 billion in January- March 2018 compared with NIS 6.1 billion in January- March 2017.

The trade deficit of goods (excl. diamonds) with the “Other Countries” totaled NIS 2.2 billion in January- March 2018 compared with NIS 0.9 billion in January- March 2017.

In comparison, there was a trade surplus of goods (excl. diamonds) with the USA which totaled NIS 1.3 billion in January- March 2018 compared with NIS 4.9 billion in January- March 2017.

Imports of goods January – March 2018

The trend data calculated by the Central Bureau of Statistics show that imports of goods (excluding ships, aircrafts, diamonds and fuels) increased by 19.8% at an annual rate in January – March 2018, following an increase of 20.2% in October – December 2017 (1.5% monthly average).

Trend data indicate that imports (excluding diamonds) from the USA increased by 35.3% at an annual rate in January – March 2018 (2.5% monthly average), following an increase of 28.3% in October – December 2017 (2.1% monthly average).

Trend data indicate that imports (excluding diamonds) from the Asian Countries increased in the last three months by 14.2% at an annual rate, following an increase of 9.0% in October – December 2017. Since the beginning of 2018, imports (excluding diamonds) from South Korea, Japan and Hong Kong increased significantly compared with the same period in 2017.

Trend data indicate that imports (excluding diamonds) from the EU countries increased by 22.9%, at an annual rate, in January – March 2018 (1.7% monthly average), following an increase of 30.5% in October – December 2017 (2.2% monthly average). Since the beginning of 2018, imports (excluding diamonds) from the United Kingdom, Germany and Netherlands increased significantly compared with the same period in 2017.

Trend data indicate that imports (excluding diamonds) from the “Other Countries” increased by 1.0% at an annual rate in the last three months, following an increase of 1.1% in October – December 2017. Since the beginning of 2018, imports (excluding diamonds) from Switzerland, South Africa and Norway increased significantly compared with the same period in 2017.

Exports of goods January – March 2018

The trend data show that exports of goods (excluding ships, aircrafts and diamonds) increased by 3.8% at an annual rate in January – March 2018, following an increase of 3.1% in October – December 2017.

According to trend data, exports (excluding diamonds) to the EU countries decreased by 17.9%, at an annual rate, in January – March 2018, following a decrease of 11.5% in October – December 2017.Since the beginning of 2018, exports (excluding diamonds) to Belgium, the United Kingdom and Sweden decreased significantly compared with the same period in 2017.

Trend data indicate that exports (excluding diamonds) to the USA increased by 3.8%, at an annual rate in January – March 2018, following a decrease of 14.7% in October – December 2017.

According to trend data, exports (excluding diamonds) to the Asian Countries increased by 100.5% in the last three months, at an annual rate (5.9% monthly average), following an increase of 86.6% in October – December 2017 (5.2% monthly average). Since the beginning of 2018 exports (excluding diamonds) to China, Japan and South Korea increased significantly compared with the same period in 2017.

According to trend data, exports (excluding diamonds) to the “Other Countries” decreased by 13.7%, at an annual rate, in January – March 2018, following an increase of 0.9% in October – December 2017. Since the beginning of the year exports (excluding diamonds) to Russia, Switzerland and Argentina decreased significantly compared with the same period in 2017. (CBS 30.04)

An International Monetary Fund (IMF) team visited Muscat 3 – 16 April to hold the 2018 Article IV consultation discussions with Oman. At the conclusion of the visit, the IMF made the following statement:

“Non-hydrocarbon economic growth is estimated to have picked up modestly in 2017 to about 2%, from 1.5% in 2016, as higher confidence in the wake of the rebound in oil prices helped offset the impact from fiscal consolidation on economic activity. However, overall real GDP growth turned negative (-0.3%) because of a significant contraction of oil output (-2.8%) due to the implementation of the OPEC+ agreement. The government’s diversification efforts and the planned completion of major infrastructure projects are expected to gradually raise non-hydrocarbon growth to about 4% over the medium term.

“Preliminary budget execution data point to a significant improvement in the fiscal position last year, on the back of higher oil prices and spending restraint. The government has made progress in curtailing both current and capital expenditure, helping reduce the breakeven fiscal oil price. Combined with a large increase in oil revenues, this brought the overall deficit down to around 12.8% of GDP from 21% of GDP in 2016. Nonetheless, budget implementation proved challenging, with some spending overruns and tax revenue underperformance compared to the budget. The government is undertaking further reforms to raise non-hydrocarbon revenue, such as introducing value-added and excise taxes, and intends to continue with spending restraint. This would bring the deficit to below 4% of GDP in the next two years.

“Notwithstanding commendable progress in advancing fiscal consolidation, the deficit is expected to pick up to about 7% of GDP by 2023, reflecting a gradual decline in the IMF’s oil price assumptions and an increase in interest payments. Substantial additional fiscal adjustment is therefore needed. It should be underpinned by further efforts to tackle current spending rigidities – particularly on the wage bill and subsidies – streamline the large public investment program, and introduce new taxes over the medium term. These efforts should be accompanied by social impact analysis and measures to protect vulnerable households. The authorities are encouraged to formulate fiscal policy decisions within a more formal medium-term framework to reduce implementation risks. Strengthening budget planning and expenditure controls would also help reduce budgetary overruns and prevent payment delays.

“The banking sector appears sound, with banks featuring high capitalization, low non-performing loans, and strong liquidity buffers. Although private sector credit growth has somewhat moderated, and interest rates are likely to increase with U.S. monetary policy tightening further, credit growth is expected to remain healthy. Against this backdrop, the recent countercyclical measures may help banks and borrowers weather the more difficult economic environment. Maintaining robust banking sector regulation and supervision is important to bolster financial sector resilience in support of sustained economic growth.

“Gross reserves of the Central Bank of Oman decreased by about $4 billion in 2017 to $16 billion. The government’s external assets in the State General Reserve Fund, Oman’s sovereign wealth fund, provide significant additional external buffers. The exchange rate peg to the U.S. dollar is appropriate considering the current structure of the economy.

“Structural reforms that promote private sector development, productivity and competitiveness gains, diversification, and job creation for nationals are paramount. Tackling labor market inefficiencies – for example by better aligning public sector wages and benefits with the private sector, encouraging more labor market flexibility for nationals, and sustaining efforts to improve education and training – is key in this respect. Further improving the business climate, including by reducing excessive regulations and fostering competition, and accelerating Tanfeedh implementation are also important. (IMF 19.04)

As posted on 17 April in Al-Monitor, when the National Election Authority announced the results of the presidential election on 2 April, it was not only declaring President Abdel Fattah al-Sisi’s victory for a second presidential term, but also the continuation of his economic program, known in the media as “the economic reform program,” for the next four years.

Although this program attracted investments, increased foreign reserves and improved Egypt’s credit rating from stable to positive, many challenges remain unaddressed. These include the high inflation and soaring prices of basic commodities. Added to this is the alleged lack of fair economic competition between the armed forces’ institutions and the private sector. The armed forces are able to take greater market shares by offering commodities with lower prices since they incur lower costs in terms of taxes, customs and salaries compared to the private sector.

With Sisi and his program given another four-year term, millions of Egyptians are expecting more achievements.

Inflation in Egypt reached record levels in 2017 with 30.7% compared to 13.8% in 2016. In this framework, Faraj Abdel Fattah, a professor of economics at the University of Cairo, told Al-Monitor that curbing inflation tops Sisi’s list of economic priorities during his second term. He noted that the rising inflation resulted from floating the Egyptian pound against foreign currencies in November 2016. Consequently, product prices were blown up while employees’ average wages stagnated, bringing up the inflation rate.

Abdel Fattah believes Sisi’s economic program for his second term will aim at curbing inflation by reducing imports and increasing exports, mainly natural gas and petrol exports. This dynamic will ensure more foreign exchange liquidity to curb the dollar price against the Egyptian pound.

Rashad Abdo, head of the Egyptian Forum for Economic and Strategic Studies, told Al-Monitor that the dollar price is unlikely to drop soon. He said that Sisi will work during his second term on maintaining the current dollar price, as this would give Egypt a competitive asset in attracting investments. “Investors prefer a country that values their foreign capital at a high price in the local currency used for their foreign investment,” he added.

He said that Sisi’s plan to reduce inflation will capitalize on a resurgence of foreign tourism, which was the sector most Egyptians relied on as a source of income in foreign currency. Abdo noted that inflation will drop when the state succeeds in encouraging huge foreign investments and projects that employ Egyptians and pay them rewarding salaries.

The soaring inflation in Egypt basically stems from the rise in the prices of basic goods and services due to Sisi’s program aimed at gradually lifting subsidies on petroleum, electricity, water and railway tickets, among other things, and from the rising food prices as a result of a lack of government supervision. In this regard, Wael al-Nahas, an economic adviser to a number of investment institutions, told Al-Monitor that Sisi’s first term established the foundations of the policy of lifting subsidies while disregarding the economic situation of ordinary citizens. He pointed out that the first term also set the stage for the policy of the hostile free market in which the trader and the investor impose the price they want without supervision or competition from the public sector, “which the state is also seeking to privatize.”

Medhat Nafie, general manager of risk management at the Egyptian Exchange, told Al-Monitor, “I do not expect the government to reinstate subsidies or to stop lifting subsidies on products. It is unlikely that the state would impose tariffs on free markets, but I think it will implement progressive taxes on investors making a huge profit from overpricing. The armed forces and their institutions will continue pumping basic food commodities — rice, sugar, oil, bread, chicken and meat — at reasonable prices.”

In a 20 March interview for the documentary “A Nation and a President,” Sisi pointed out that the participation of the armed forces in the economic activities in Egypt does not exceed 2% of the gross domestic product, which is expected to total 4.3 trillion Egyptian pounds ($240 billion) by the end of the fiscal year 2017-18. He added that the armed forces are not seeking profit or competition with the private sector, but rather want to provide citizens with a decent life by supplying goods at reasonable prices.

This was not the first time Sisi had discussed the presence of the armed forces in the economic sector in the form of companies producing mineral water, food commodities and some household appliances. He said in statements on 24 December 2017 that the participation of the armed forces in the Egyptian economy ranged between 1.5% and 2%, hoping that this ratio would increase to 50%.

Prime Minister Sherif Ismail said in a television interview on CBC in October 2017 that he expects the participation of armed forces in the Egyptian economy to drop in the next three years, by 2020. This clearly reflects conflicting opinions between Sisi and Ismail on the continued economic activity of the armed forces.

Many critics accuse the military institution of not paying taxes and customs fees and exploiting recruits who receive low salaries as employees. Commenting on this, head of the Al-Asima Center for Economic Research and Studies, Khaled El-Shafey, told Al-Monitor, “The presence of the armed forces in Egypt’s national economy does not affect people negatively and is not unjust to the private sector in terms of competition.” He said, “The monopolistic practices of some businessmen and investors and their excessive increase of prices gave the Egyptian armed forces an opportunity to be present in the Egyptian economy to protect citizens from this greed.”

Shafey noted, “Therefore the armed forces aim to serve middle- and low-income citizens, while the private sector seeks to serve well-paid citizens. So there is no competition to begin with. Even if there were a competition, the armed forces institutions are under the supervision of the Accountability State Authority and the Ministry of Finance that verify these institutions pay the due taxes and customs to the Tax Authority and Customs Department affiliated with the Ministry of Finance.” Shafey argued that the armed forces have concluded partnerships with private sector companies for the implementation of roads and bridges projects, affirming that “if there were no fair competition the private sector would not have agreed to these partnerships.”

David Awad, an Egyptian journalist, began his career as a trainee at Al-Ahram al-Ektesady and then moved to Radio Mubashir al-Ektesady as a producer. Awad focuses on economics, media and the arts. (Al-Monitor 17.04)

Following a slowdown in activity in 2016, growth recovered strongly last year. Large fiscal stimulus (including increased PPP activity) and policy-driven credit impulse boosted consumption and investment in 2017. Exports also increased sharply, but a pick-up in imports in the second half of the year tempered the growth contribution of net exports. Such has been the strength of the recovery that the economy now faces clear signs of overheating: a positive output gap, inflation well above target, and a wider current account deficit. Signs of possible oversupply in the building and construction sector are also emerging.

Fiscal and quasi-fiscal policies have become more expansionary. The fiscal deficit increased in 2017, due to temporary tax reductions, continued minimum wage subsidies, and employment incentives. Contingent liabilities are increasing, due to still-high public-private partnerships (PPP) activity and the expansion of state loan guarantees.

Monetary policy has been tightened but inflation rose to almost 12% during 2017. The central bank (CBRT) increased the effective cost of funding to banks by almost 500 basis points since November 2016 to contain inflation spillovers from the large Lira depreciations in the last quarters of 2016 and 2017. The ex-post, real effective policy rate has, however, remained close to zero until recently.

The sizeable expansion of state loan guarantees was the main driver behind the acceleration of bank credit growth in 2017, although the relaxation of macro-prudential measures also contributed. Commercial loan growth has since moderated, as the impulse from state loan guarantees fell towards the end of the year.

Bank capital levels remain high, although some buffers are decreasing. Higher profits improved capital adequacy in 2017, reflecting in part the relaxation of prudential norms and the conservation of capital through the use of state loan guarantees. The headline non-performing loans ratio remains low, but a broader definition of loan impairment signals emerging loan quality weakness and signs of difficulties in some large corporate borrowers are emerging.

In 2018, economic activity is expected to decelerate to close to 4½%. Continued accommodative monetary, fiscal, and financial policies will support growth, but inflation is projected to remain well above target and the current account deficit is expected to remain elevated.

Executive Board Assessment

Executive Directors welcomed Turkey’s solid economic performance last year, driven by strong policy stimulus and favorable external conditions. At the same time, Directors noted that rapid growth has contributed to economic overheating, in the form of widening internal and external imbalances, including a positive output gap, high inflation and a wider current account deficit.

Directors called for frontloaded monetary tightening to help contain inflation, re anchor expectations, underpin the Lira, and allow reserves to be rebuilt. They agreed that moving over time to more conventional monetary instruments would help underpin the transparency and effectiveness of monetary policy. Directors underscored the importance of central bank independence.

While noting the low starting point for public debt, Directors emphasized that rising risks call for fiscal prudence and further containing fiscal and quasi fiscal policies. They highlighted that sustained measures are needed to achieve a general government primary surplus next year. These could include broadening the revenue base, raising direct taxation, improving VAT efficiency, limiting public wage rigidities and reducing ad hoc subsidies.

Directors welcomed the authorities’ initiatives to strengthen the PPP risk management and reporting framework. They underscored that building on this work would help preserve fiscal space. Directors indicated that the scope and role of extra budgetary and other non-central government entities, and institutions such as the newly created Sovereign Wealth Fund, should be transparent as well as carefully defined and monitored.

Directors called for further strengthening the oversight and governance of the banking sector, as outlined in the FSAP assessment. They supported the authorities’ decision to better target the Credit Guarantee Fund and introduce limits on SME foreign currency borrowing. Directors encouraged continued efforts to strengthen bank supervision and to make the macro-prudential regime more robust, in particular, addressing the risks related to non-financial corporates, given their increased leverage and large negative foreign exchange positions.

Directors encouraged the authorities to take advantage of the current strong growth environment to push ahead with structural reforms to increase productivity and Turkey’s medium term growth potential. They emphasized that reform efforts should give priority to maintaining strong institutional capacity and improving regulatory predictability to strengthen the investment climate. Directors also noted that labor market reform is crucial, especially on public wage indexation, minimum wages, addressing skills gaps, and further increasing female labor force participation, including by promoting flexible work options. They saw merit in further reforms of the voluntary pension system to increase domestic savings. Directors commended the authorities for hosting the large number of refugees and for their efforts to integrate them into the labor market. (IMF 30.04)

Amberin Zaman posted in Al-Monitor on 18 April that the European Union’s most recent report on the state of Turkey’s bid to join the bloc appears to confirm the view of many analysts that the current process is riddled with hypocrisy and is not beneficial to either party.

Lost amid Turkish President Erdogan’s stunning announcement on 18 April that presidential and parliamentary elections would be held concurrently on 24 June, nearly 17 months ahead of schedule, was the European Union’s yearly report on Turkey’s progress toward full membership in the bloc. The harshest report since talks began in 2005 received scant attention from the press, but it triggered howls of protest from Turkish officials.

The report decries the weakening of Turkey’s democracy, ongoing mass arrests in the wake of the failed 2016 coup and mounting pressure on civil society along with the lack of a level playing field in the run-up to the April 2017 referendum on switching from a parliamentary system to an executive presidency. In addition, it notes “serious backsliding” in judicial reform and freedom of expression and cites human rights abuses in the majority-Kurdish southeast.

Regarding the state of emergency Ankara imposed after the attempted putsch, the EU wrote that it needs to lift it without delay. The Turkish government extended emergency rule by a further six months the day of the report’s release. As for the fight against corruption, the report says, “No progress was achieved.” Under the current circumstances, it is “unthinkable” in the EU’s eyes to open new accession chapters. Johannes Hahn, EU commissioner for enlargement negotiations, declared that Turkey was taking “huge strides away” from the bloc.

Omer Celik, Turkey’s EU affairs minister, dismissed the report as unfair, saying, “It is a report which has no vision and content, which is far from understanding the intensity, dimensions and perspective of [Turkey-EU] relations.” He said he would pen a letter of protest to the European Commission on the grounds that the terms of the migration deal Ankara struck with the Europeans were being violated. Under the deal, which Erdogan periodically threatens to trash, Turkish authorities pledged to stem the flow of millions of refugees to Europe in exchange for billions of euros in funding for care of the refugees in Turkey.

Turkey has meanwhile been growing increasingly hawkish toward the EU and fellow NATO member Greece. Tensions escalated in February after a Turkish patrol boat barged into a Greek coast guard vessel close to Imia, a rocky outcrop of islets in the Aegean Sea that both countries claim. On 16 April, Turkey accused Athens of “provocation” after the alleged hoisting of a Greek flag by three Greeks on the islets.

The Turkish Foreign Ministry slammed the EU for, as Turkey sees it, siding with Greece in the matter. In a 17 April statement, the Foreign Ministry said, “The Kardak [Imia] Rocks and their territorial waters and airspace above them are exclusively under Turkish sovereignty. The [unconditional] support … by the EU to member states in their disputes with third countries [does] not contribute to the resolution of those issues within the framework of good neighborly relations and international law.“

Ankara is also furious that Greece is refusing to return eight Turkish military officials accused of taking part in the coup. Government spokesman Bekir Bozdag accused Athens of violating international law by failing to extradite the men.

Analysts say that Turkey’s EU accession process is, in the words of Asli Aydintasbas, a fellow at the European Council on Foreign Relations, cloaked in hypocrisy. Aydintasbas wrote in a recent report, “Most European countries would like Turkey to remain in the limbo between being and insider and an outsider.” Germany and France began talking about a “privileged partnership” status only days after the accession talks began. Former French President Valery Giscard d’Estaing famously said that admitting Turkey “would be the end of the European Union” because it has a “different culture” (read “Muslim”). Meanwhile, Austria openly opposes Turkish membership altogether.

The mendacity cuts both ways. Marc Pierini, a former EU ambassador to Turkey and a visiting fellow at Carnegie Europe, told Al-Monitor, “Ankara has lost any interest for the accession rationale since it runs counter to the leadership’s domestic political priorities.” Pierini was referring to Erdogan’s bouts of EU bashing, including branding European leaders as “Nazis” in a crudely cynical bid to increase his votes.

Nate Schenkkan, project director for the Nations in Transit project at Freedom House, agrees that Turkey’s current government is not interested in pursuing the reforms needed to qualify for full EU membership. He told Al-Monitor, “The report matters as a record and a document of where the accessions process stands. But it doesn’t change anything for Turkey. They already know the EU’s requirements and have rejected them in deed.” Still, Pierini said that “even if the tone remains acrimonious,” the hope on both sides is “that dialogue can be maintained on trade, counterterrorism, refugees, and Syria.” The former diplomat concluded, “The Turkish president will keep a dialogue with the EU but not on accession. Since the purge and the ‘Nazi’ remarks, the personal connection with his EU peers is beyond repair.”

Schenkkan argues that a new relationship needs to be struck between the sides. “Keeping the process open as a facade undermines the credibility of accession for other countries,” he said. Even worse, “It allows nationalist-populists in the EU to own the issue of ending accession.”

France’s refreshingly candid president, Emmanuel Macron, apparently agrees. Standing beside Erdogan in January at a joint news conference in Paris, Macron said that “it is clear that recent developments and choices do not allow any progression.” Thus, “We must get out of a hypocrisy that consists in thinking that a natural progression towards opening new chapters is possible. It’s not true.”

Amberin Zaman is a columnist for Al-Monitor’s Turkey Pulse who has covered Turkey, the Kurds and Armenia for The Washington Post, The Daily Telegraph, The Los Angeles Times and the Voice of America. She served as The Economist’s Turkey correspondent between 1999 and 2016. She was a columnist for the liberal daily Taraf and the mainstream daily Haberturk before switching to the independent Turkish online news portal Diken in 2015. (Al-Monitor 18.04)

Mehmet Cetingulec posted on 20 April in Al-Monitor that the Turkish central bank’s gold reserves have reached an unprecedented level of more than $25 billion under a strategy shift driven by a combination of financial strains and risks stemming from tensions with the United States.

Turkey’s central bank, in a fundamental shift in its reserve policy, is stocking gold and scaling back on foreign exchange after many years of keeping gold reserves at a fixed level and trying to boost foreign exchange. In the first week of April alone, the central bank’s gross foreign exchange reserves declined to $83 billion from $84.7 billion the previous week, while gold reserves stood at about $25.3 billion.

The unprecedented increase in gold reserves propelled Turkey to 10th place in terms of gold reserves in February. According to the World Gold Council, Turkey had 546.8 tons of gold that month, compared to 116 tons in September 2011. In terms of value, the country’s gold reserves increased by about $10 billion over the past year. What is driving the increase?

A major stimulant was a 2011 decision by the central bank allowing banks to hold 10% of their reserve requirements in gold. The decision led the banks to introduce financial products to lure the so-called under-the-pillow gold from Turkish households, that is, gold coins and jewelry kept as a means of investment and savings. Hence, gold flowing from households into the banking system has been one of the factors boosting the central bank’s reserves.

Meanwhile, in late 2017, the Treasury introduced gold bonds in another bid to draw out household stashes. Last year, the combined outcome of the banks’ and the Treasury’s efforts was 75 tons of gold moving from households into the financial system, according to sector officials.

In a sign that Turkey will continue to stock up on gold, President Erdogan on 17 April argued that international loans should be based on gold rather than dollars. Speaking at an economic gathering in Istanbul, he remarked, “Why do you have to make the loans in dollars? Let’s base the loans on gold. We need to rid states and nations of exchange rate pressure. Throughout history, gold has never been a means of pressure.” Erdogan also said that he had made the suggestion to International Monetary Fund officials at a G-20 meeting.

Ankara’s desire to boost the use of gold pertains not only to borrowing, but also to trade. This meshes with its efforts to promote interest-free banking, where lending systems are based on gold. Some, however, see more covert motives behind Turkey’s stocking on gold.

Ufuk Soylemez, a former state minister for the economy and former head of the state-owned Halkbank, believes Ankara might be taking precautions against the prospect of US sanctions against Halkbank for its role in a scheme to get around sanctions on Iran. In January, Mehmet Atilla, a senior Halkbank manager, was found guilty of conspiracy and bank fraud after a month long trial in a New York federal court.

Soylemez told Al-Monitor, “With an abrupt policy change, the central bank has been selling dollars and raising gold reserves to unprecedented levels, which could be a precaution against the risk of multi-billion dollar US fines on Turkish banks.”

He also drew attention to other unusual moves by the central bank, noting, “Since the end of last year, it has been intensively selling its US bonds and converting its deposits in the United Sates to gold, in addition to moving gold reserves kept in the United States to Europe.” He added, “As of 23 February, gold reserves hit $25.2 billion, up from $14 billion at the end of 2016. Gold now makes up almost a fourth of the total reserves, which are worth some $114.5 billion.”

According to Soylemez, the idea of using gold to curb the dollar’s dominance in the international banking system and financial markets is easier said than done. “This method can materialize only through bilateral consensus and agreements between countries,” he said. “With Iran, for instance, there was a similar trade in return for gold. Yet convincing the world to accept this as a new system is not easy.”

In what Soylemez views as another sign of Turkey-US tensions, he noted that the 30 year-old New York branch of the state-owned Ziraat Bank had been recently closed.

In a 17 April article, Hurriyet’s economy pundit Ugur Gurses reported that last year the central bank withdrew all 28.6 tons of gold it was keeping at the US Federal Reserve, moving it to the Switzerland-based Bank of International Settlements (BIS) and the Bank of England. According to the report, at the end of 2017, Turkey’s gold reserves totaled 564.7 tons, including 375.4 tons at the Bank of England, 18.7 tons at BIS, 33.7 tons at the Turkish central bank and 136.8 tons in the central bank’s account at the Istanbul stock exchange.

For Masum Turker, another former state minister for the economy, the primary aim of collecting under-the-pillow gold is to provide liquidity to the struggling economy. “To issue money, you need to have foreign exchange or gold or other precious metals. … If they fail to pump Turkish lira into the market, this will lead to a liquidity crunch,” Turker told Al-Monitor. “Let’s say a person has 100 gold coins at home. He takes those coins to the bank and the bank deposits them at the central bank in return for Turkish liras. Then, this money becomes a loan for someone else. That’s how household gold is used to finance the market and turn the wheels of the system.”

Also according to Turker, the drive to accumulate gold aims also to increase Turkey’s resilience in the face of any external pressures it might confront on global financial markets at a time when the flow of foreign funds to Turkey has slowed, and its own exports are not strong enough to ease foreign exchange gaps.

Turkey’s hard currency woes have significantly deepened due to the ongoing slump of the Turkish lira, which lost 5% of its value against the greenback in March alone.

In times of financial crises, gold is generally a better performing instrument than foreign exchange, which appears to be another reason why Turkey is increasing its gold reserves. While stocking up on gold, Ankara is also trying to promote the use of national currencies in foreign trade, given that it is keen to reduce its reliance on reserve currencies, such as the dollar and the euro. The deal it reached with Iran in 2017 to trade in national currencies might extend to gold in the coming period. Paying in gold for Iranian gas and oil could come in handy for Turkey in difficult times.

Mehmet Cetingulec is a Turkish journalist with 34 years professional experience, including 23 years with the Sabah media group during which he held posts as a correspondent covering the prime minister’s and presidential offices, economy news chief and parliamentary bureau chief. For nine years, he headed the Ankara bureau of the daily Takvim, where he also wrote a regular column. He has published two books. (Al-Monitor 20.04)

The upgrade of Cyprus’s IDRs reflects the following key rating drivers and their relative weights:

High: Cyprus’s external financing flexibility has improved substantially since the country exited the macroeconomic adjustment program in March 2016. The government tapped international markets in June 2017 and external interest payments are set to decrease to 6.6% of current account receipts in 2018-2019, down from an average 16.2% in 2011-2012. Cyprus is also attracting large foreign direct investments in the construction, tourism, energy and education sectors. Cash reserves were €1.2 billion at end-2017 covering expected gross financing needs for 2018.

Recently published data from the Central Bank of Cyprus (CBC) indicates that external sector statistics are materially distorted by special purpose entities (SPEs), including shipping and financial companies. We expect the large import-content of investments will keep weighing on the current account deficit, which we project at about 6% of GDP in 2018-2019, compared with a ‘BB’ median of 3.2%, but it would be significantly lower when excluding SPEs, as per the CBC’s estimates. Similarly, net external debt (NXD) excluding SPEs would turn into a small net asset position of less than 3% of GDP in Q3/17 according to the CBC, compared with a non-adjusted NXD of 164% of GDP at-end 2017 and a ‘BB’ median of 13%.

Cyprus’s fiscal performance has benefited from a very strong cyclical economic recovery and prudent fiscal policy. We forecast the government will continue recording fiscal surpluses of 1.1% of GDP in 2018 and 2019, after over-achieving its fiscal target in 2017 with an estimated surplus of 1.9% of GDP, compared with a ‘BB’ median fiscal deficit of 3.2%. A dynamic labor market and sustained economic momentum will support revenues while the recent agreement with trade unions limiting the payroll rise to nominal GDP growth and the hiring freeze adopted in the public sector will help contain current spending.

Medium: Medium-term debt dynamics point towards a firm downward trend, which will provide Cyprus with some fiscal room to absorb any materialization of contingent liabilities arising from the banking sector. Strong nominal GDP growth, at a forecast 4% over the medium term, ongoing expected primary surpluses and a very gradual increase in nominal effective interest rates will lead to a decline in the gross general government debt (GGGD)/GDP ratio to less than 90% by 2022.

We expect real GDP growth to remain robust in the coming years and average 3.4% in 2018-19, supported by a dynamic tourism sector and buoyant construction activity. Private sector debt and non-performing exposures (NPEs) remain high and are still weighing on new lending, but we believe economic growth would be resilient to a possible acceleration in NPEs normalization. The recovery relies largely on foreign-financed investments, which should minimize any contraction in domestic demand. Households’ deposits are also substantial at 123% of GDP at end-2017, twice the stock of households’ housing loans and strong employment growth and rising wages would help smooth private consumption if debt service costs were to increase.

Deleveraging of the private sector is ongoing, with households’ and corporate debt (excluding non-financial SPEs) declining by 5pp in Q3/17 to 250% of GDP. Increased earnings, ongoing resolution of mortgage arrears, recovering house prices and upcoming legislative reforms enhancing the foreclosure and insolvency framework might foster further debt repayment.

Cyprus’s ‘BB+’ IDRs also reflect the following key rating drivers:

The weakness of the banking sector remains a risk to public finances and weighs on Cyprus’s credit profile. The government deposited €2.5 billion in Cyprus Cooperative Bank (CCB) in April 2018 to alleviate depositors’ concerns ahead of the expected sale of the state’s majority stake in the bank and following a recent outflow of deposits from CCB. We expect this to lead to an increase in the GGGD/GDP ratio to 104% of GDP in 2018, from 97.5% in 2017.

In addition, the Cypriot authorities intend to launch a new “Estia” scheme which would apply to the banks’ problem housing loans to vulnerable groups, currently estimated at €3 billion. The scheme will rely on loan restructurings and state subsidies to incentivize borrowers’ repayment and would imply an estimated yearly fiscal cost of 0.25% of GDP over the medium term.

The ratio of NPEs to total loans declined gradually to 42.5% at end-2017 (109% of GDP), down from 46.4% at end-2016. The decline stems from rising repayments, debt restructuring, loan write-offs and large recourse to debt-to-asset swaps. However, developments were uneven across banks, as the country’s two largest domestically-oriented banks, Bank of Cyprus (BoC) and Hellenic Bank (HB) progressed faster than its cooperative sector, where NPEs were 59% of total loans at end-September 2017.

Capitalization remains above regulatory requirements but decreased in 2017, with common equity Tier 1 declining by 1pp to 14.9% as banks increased their provisioning and recorded some losses. Unreserved NPEs for the sector amounted to €11 billion (57% of GDP) at end-2017, which could lead to some capital shortfall if losses were to crystallize and higher than expected haircuts were incurred when liquidating underlying collateral. This level of NPEs is very significant relative to the overall banking sector common equity Tier 1 capital of €5.4 billion at end-2017.

Liquidity has improved as denoted by the repayment of ECB emergency liquidity assistance balance in 2017 and deposits increased by 3.1% y-o-y to €49.4 billion in December 2017. However, non-resident deposits still represent a quarter of total deposits at BoC and a half at HB. These are largely short-term funding and confidence-sensitive and would likely become more volatile than domestic deposits in case of stress.

Rating Sensitivities

Future developments that may, individually or collectively, lead to an upgrade include:

The Outlook is Positive. Consequently Fitch does not currently anticipate developments with a high likelihood of leading to a downgrade. However, future developments that may individually or collectively lead to negative rating action include:

-Failure to improve asset quality in the banking sector; and

-Deterioration of budget balances or further materialization of contingent liabilities that results in the stalling of the decline in the government debt-to-GDP ratio.

Key Assumptions

Gross government debt-reducing operations such as future privatizations are not considered in Fitch’s baseline scenario. The projections also do not include the impact of potential future gas reserves off the southern shores of Cyprus, the benefits from which are several years into the future.
Fitch does not expect substantial progress with reunification talks between the Greek and Turkish Cypriots over the next quarters. The reunification would bring economic benefits to both sides in the long term but would entail short-term costs and uncertainties. (Fitch 20.04)

On 26 April 2018, Fitch Ratings said Greece’s second-consecutive budget surplus demonstrates the authorities’ continuing commitment to fiscal consolidation. This supports our expectation of improving debt sustainability, although how far and how fast public debt will fall will largely be determined by the nature of the debt relief currently under discussion by Greece’s international creditors.

ELSTAT said on 25 April that Greece had posted a headline budget surplus worth 0.8% of GDP in 2017, up from 0.6% a year earlier. Greece’s budget deficits in the 2014 and 2015 were 3.6% and 5.7%, respectively. Last year’s primary surplus was 4.0% of GDP.

This represents significant fiscal outperformance. Fitch had estimated a 2017 primary surplus of 1.9% of GDP, itself higher than the European Stability Mechanism (ESM) program target of 1.75%, due to higher-than-budgeted revenues and expenditure restraint. This is consistent with our view that ESM program compliance, reduced political risk, further fiscal measures and sustained GDP growth will underpin improving debt sustainability. This was reflected in our upgrade of Greece’s sovereign rating to ‘B’ in February.

Greece remains one of the few Eurozone countries whose fiscal adjustment is structural rather than chiefly cyclical. The Greek Finance Ministry said that the 2017 outturn showed that post-program targets are feasible. We think primary surpluses may fall below these targets beyond 2020, but we still believe gross general government debt (GGGD) peaked in 2016 and will fall more rapidly from next year, reaching 137% of GDP by 2025, assuming annual average nominal GDP growth of 3.5%, but not factoring in any future official sector debt relief.

Our baseline assumption sees GGGD falling further, to 132.8% of GDP in 2026. This would still be higher than the current level for Italy – the Eurozone’s second most-indebted sovereign – although the concessional nature of Greece’s public debt means that debt servicing costs are low.

Technical work by the Eurogroup on a mechanism for linking debt post-program relief to growth targets is at an advanced stage and Eurogroup president Mario Centeno said that Greece’s Eurozone creditors and the IMF were getting closer to agreeing on official sector debt relief. The Eurogroup will discuss debt relief options tomorrow at a meeting in Sofia. We do not anticipate haircuts to the official debt stock, but the prospect of other substantial debt relief measures is reflected in the Positive Outlook on Greece’s sovereign rating. (Fitch 26.04)

The Fortnightly newsletter is a free service of Atid, EDI. We are a team of economic and trade development consultants, headquartered in Jerusalem, but active throughout the region and beyond. EDI works with an international clientele interested in identifying and researching business opportunities in the region. We also serve as the regional representative offices for a number of U.S. states and bilateral Chambers of Commerce, as well as Invest Hong Kong, the Canadian Province of Ontario and European clients.

EDI’s other services include customized business delegations, partner searches, business development, market feasibility studies and tailored research reports, as well as identification of potential joint ventures for commercial clients. For more information on how we may better assist you, please visit our Web site at: http:// www.atid-edi.com.

Your email address will not be published. Required fields are marked *

Comment

Name *

Email *

Website

Clients

About Us

Since 1991, EDI has provided a wide array of clients with customized research, intelligence, contacts and strategies.
We make a difference, contributing added value to our client’s business and investment.